3 Further Reasons to add United Oil & Gas #UOG to your Watchlist
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3 Further Reasons to add United Oil & Gas #UOG to your Watchlist

THE CONTENT OF THIS BLOG / WEBSITE (OR CONTENT ASSOCIATED WITH IT) IS NOT INTENDED AS INVESTMENT ADVICE, IT IS FOR INFORMATION PURPOSES ONLY. YOU SHOULD TAKE PROFESSIONAL FINANCIAL ADVICE IN CONNECTION WITH, OR INDEPENDENTLY RESEARCH AND VERIFY, ANY INFORMATION THAT YOU FIND ON THIS BLOG / WEBSITE AND WISH TO RELY UPON, WHETHER FOR THE PURPOSE OF MAKING AN INVESTMENT DECISION OR OTHERWISE. WE ARE NOT REGULATED UNDER UK FINANCIAL SERVICES LAW. THE AUTHOR OF THIS BLOG MAY HOLD AN INTEREST IN THE STOCK FEATURED.

UNITED OIL & GAS #UOG

SHARE PRICE: 4.45P
MARKET CAPITALISATION: £12.95M (post funding)

“We are a former Tullow Oil team, with a strategy to acquire assets where the management team’s experience can drive near-term activity to unlock previously untapped value.

The aim is to build a portfolio of production, development and low-risk appraisal /exploration in Europe, whilst remaining alert for exceptional growth opportunities on a global basis”.

The following table outlines the Company’s current licences:

TO READ MY PREVIOUS BLOG ON UNITED OIL & GAS CLICK HERE

3 Further Reasons to add United Oil & Gas #UOG to your Watchlist

TWO NEAR TERM SIGNIFICANT MILESTONES

MILESTONE 1

COLTER (P1918 LICENCE) – APPRAISAL WELL Q2 / Q3 2018

Corallian (operator) plans to drill an appraisal well on Colter in Q2/Q3 2018, updip of the original discovery well, drilled by BP in 1986, in order to assess the full potential of Colter, southern UK.

The P1918 licence is adjacent to the largest onshore oil field in Europe, Wytch Farm, which has produced in excess of 450 million barrels of oil.

Optiva Securities Oil & Gas analyst Barney Gray suggests in a recent broker note:

We estimate that a successful result at Colter alone could be worth in excess of US$40m (£29m) to United on an unrisked basis, equivalent to over 8.8p per share (fully diluted).

United holds a 10%  interest in each of three licences (P1918, PEDL330 & PEDL345) held by a joint venture between Corallian as operator and Corfe Energy Limited.

In addition, an option has been granted, which United can exercise a right to purchase an additional 10% interest in these licences, on the same terms as the Initial Farmed Interest.

 

MILESTONE 2

WALTON-MORANT LICENCE, JAMAICA – 3D SEISMIC RESULTS – END OF MAY

On 4th April, the company released this RNS, “Update on Walton-Morant Licence

They announced, “Polarcus Adira”, a vessel contracted to acquire 2,250km2 of 3D seismic, arrived in Kingston on Friday 23 March 2018. After a quick turnaround, the vessel departed for deployment on the Sunday 25 March 2018, with data acquisition successfully commencing on 3rd April 2018.

The seismic acquisition is expected to take approximately 8 weeks and is centred on the high-graded Colibri prospect.

This means news should be out towards the end of May.

Optiva Securities, Oil & Gas analyst, Barney Gray suggests in a recent broker note:

“We believe that a notional 200 mmbbls development could generate a gross unrisked NPV in excess of US$600m, US$120m (£87m) net to United’s interest. It is important to note that indicative NPVs should not be examined on a standalone basis given that exploration success will de-risk future drilling significantly and has the potential to open up a new multi-billion barrel offshore play in Jamaica.”

United has a 20% equity interest, from Tullow, in the the Walton-Morant licence, which covers an area in excess of 32,000km2.

“The Walton Morant Licence, offshore Jamaica, offers a commanding Caribbean exploration opportunity with access to play diversity across three geological basins. Only 11 wells have been drilled in the area to date, and despite difficulties with well placement due to a lack of seismic control, 10 of these encountered hydrocarbon shows. Recent work, including extensive onshore fieldwork, has confirmed the presence of all the elements required for a working petroleum system, and has also identified a thermogenically derived offshore oil seep close to the main prospect of interest, providing further confidence that there is the potential to find significant commercial volumes within the licence.”

 

FULLY FUNDED

On the 20th April United Oil & Gas announced, “that it has conditionally raised £2.5 million at a price per share of 4.25 pence”.

Prior to the placing they had £1.7m in cash and the extra money no means they are fully funded for its exploration and appraisal activities in the current year and search for other opportunities to continue to grow the company.

 

CHAIRMAN APPOINTMENT

On the 19th February announced that, “Mr. Graham Martin has joined the Board as a Non-Executive Chairman with immediate effect.

Mr. Martin is currently a Non-Executive Director at Kenmare Resources plc, one of the leading global producers of titanium minerals and zircon listed in London and Dublin.

He has also previously served as an Executive Director, General Counsel and Company Secretary at Tullow Oil plc. From 1997 until 2016, Mr. Martin was centrally involved in the growth of Tullow Oil plc into a FTSE100 business, and in the company’s transformative M&A programme.

It was also revealed that, “Graham Martin will subscribe for the Subscription Shares, for a total consideration of approximately £60,000”.

 

How does it fit in with my research model, C.C.A.S.S.H which you can read more about by clicking here

GREEN = POSITIVE

BLACK = NEUTRAL

RED = NEGATIVE

CAPITALISATION

£12.95M is a small cap and has plenty of potential if you look at the potentail of even one of their projects and they have a possible seven prospects.

CHART:

The share price is off its high and recently bounced off the grand daddy of all moving averages, the 200 day. The recent placing at 4.25p will also help with support.

ASSETS:

On the 20th April United Oil & Gas announced, “that it has conditionally raised £2.5 million at a price per share of 4.25 pence”.

Prior to the placing they had £1.7m in cash and the extra money no means they are fully funded for its exploration and appraisal activities in the current year and search for other opportunities to continue to grow the company.

SHAREHOLDERS:

The management have skin in the game:

Brian Larkin (CEO) 6,968,351 (2.39%)
Jonathan Leather (CFO) 3,484,150 (1.2%)
Graham Martin (Chairman) 1,411,764 (0.485%)

SIGNIFICANT MILESTONE:

Colter in Q2/ Q3

Results of 3D seismic on their Walton Morant Licence, offshore Jamaica should be released in the final week of May, which is the week commencing 29th.

HEAD HONCHOS:

Brian Larkin, Jonathan Leather and Graham Martin are hugely experienced oil and gas men, who have held significant positions in many a company, including Tullow Oil who they still have a working relationship with, which puts them in an advantageous position to most small oil and gas companies.

Investing is small oil and gas companies is high risk but United Oil & Gas have, within less than a year, constructed a diversified portfolio consisting of low risk, revenue generating assets that will help fund, higher risk and potentially company transformational prospects.

The managment’s ambition has been shaped and inspired by the very successful Tullow Oil, where they previously worked and with whom they still have a very healthy working relationship.

I have spoken to Brian, the CEO several times and there’s no doubting he wants to build United Oil & Gas into a substantially larger company and his strategy to do that, so far, looks very sound. He is also not wasting any time in doing deals, having completed four of them involving 7 licences in under a year.

Even though the management are very ambitious their experience means they will never risk the company on one, make or break, drill but one of the riskier drills, should they be successful, could seriously re-rate the company’s valuation.

Their broker Optiva Securities have already put a target of 13.5p on the company and this doesn’t include the very exciting Walton-Morant licence, on which they should be releasing news soon.

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THE CONTENT OF THIS BLOG / WEBSITE (OR CONTENT ASSOCIATED WITH IT) IS NOT INTENDED AS INVESTMENT ADVICE, IT IS FOR INFORMATION PURPOSES ONLY. YOU SHOULD TAKE PROFESSIONAL FINANCIAL ADVICE IN CONNECTION WITH, OR INDEPENDENTLY RESEARCH AND VERIFY, ANY INFORMATION THAT YOU FIND ON THIS BLOG / WEBSITE AND WISH TO RELY UPON, WHETHER FOR THE PURPOSE OF MAKING AN INVESTMENT DECISION OR OTHERWISE. WE ARE NOT REGULATED UNDER UK FINANCIAL SERVICES LAW. THE AUTHOR OF THIS BLOG MAY HOLD AN INTEREST IN THE STOCK FEATURED.

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THE CONTENT OF THIS BLOG / WEBSITE (OR CONTENT ASSOCIATED WITH IT) IS NOT INTENDED AS INVESTMENT ADVICE, IT IS FOR INFORMATION PURPOSES ONLY. YOU SHOULD TAKE PROFESSIONAL FINANCIAL ADVICE IN CONNECTION WITH, OR INDEPENDENTLY RESEARCH AND VERIFY, ANY INFORMATION THAT YOU FIND ON THIS BLOG / WEBSITE AND WISH TO RELY UPON, WHETHER FOR THE PURPOSE OF MAKING AN INVESTMENT DECISION OR OTHERWISE. WE ARE NOT REGULATED UNDER UK FINANCIAL SERVICES LAW. THE AUTHOR OF THIS BLOG MAY HOLD AN INTEREST IN THE STOCK FEATURED.

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