United Oil & Gas Shares Drop Amidst Lower Prices and Production

Shares of United Oil & Gas took a hit on Tuesday, falling by 26%. The company reported a drop in revenue during the first half of the year, largely attributed to lower oil prices and production.

As of 0726 GMT, shares were down 0.80 pence at 70.60 pence.

According to the oil-and-gas company, oil production from the Abu Sennan Licence suffered a decline. United Oil & Gas holds a 22% non-operating interest in the license. On average, the license produced 1,051 oil barrels per day, accompanied by an additional 93 barrels of oil equivalent in net gas. This is in comparison to the averaged 1,552 daily oil barrels produced in the first half of 2022.

Additionally, the company anticipates a decrease in revenue from $9.8 million to $6.4 million compared to the previous year. The average realized oil price per barrel from Egypt is expected to be around $78, down from $105.

Furthermore, the company’s cash reserves as of June 30 stood at approximately $550,000, a significant decrease from $3.8 million. This decline is attributed to the ongoing macro-economic challenges impacting the Egyptian economy.

In light of these challenges, Chief Executive Brian Larkin expressed awareness and optimism for the future. He stated, “We are cognisant of the short-term challenges in Egypt and with this in mind are delighted to continue drilling in the second half, initially targeting one exploration and one appraisal well In this highly prospective licence.”