U.S. Oil & Gas Plc.
(“U.S. Oil” or the “Company”)
U.S. Oil & Gas Plc, the oil and gas exploration company with assets in Nevada, makes the following announcement:
On 26 April 2019, the Nevada Division of Minerals informed the Company it had approved its application to frack the Eblana-3 well on federal lease #87414 in Hot Creek Valley, Nevada. At its AGM of 30 May 2019, the Company informed shareholders that the fracking plan was currently being evaluated by its technical team and by independent experts in the light of a developing geological picture of the oil system in the valley. On receiving their considered views, the Board would then decide whether or not to proceed with the frack. The Board would also take into account alternative exploration proposals.
The review exercise is now complete. Recommendations to the Board are that it should not proceed with fracking Eblana-3, as it may not offer a sufficiently high chance of producing a well capable of flowing hydrocarbons for an extended period at acceptable rates. The decision of the Board is therefore not to proceed with the frack but instead to allocate the funds to drilling a further well or wells.
The latest geological studies carried out by the Company indicate that oil in the valley centre is mostly migrating through the lease area of Eblana-1 and Eblana-3 rather than being trapped in large quantities. Significantly more prospective locations with possibly superior traps are believed to exist within the Company’s lease area to the west and to the east. The western play targets Paleozoic strata and the eastern play the Tertiary.
Subject to funding and regulatory permissions, the Company is considering drilling a further well or wells to the west, where the current basin model indicates a structural analogue of Railroad Valley’s Grant Canyon field may be present. Grant Canyon historically included the most productive onshore well in the USA, flowing at over 4,000 bopd.
Based on geomagnetic, geochemical and existing seismic data, as well as downhole data from Eblana-1 and Eblana-3, the prospectivity of the western play is highly encouraging. In this area, the Paleozoic strata rise to relatively shallow depths, currently estimated to be 3,500 ft. or less, potentially allowing for the development of low-cost wells. Intensive data analysis and modelling efforts are ongoing, and planned data collection includes seismic surveys to confirm structural aspects of identified leads. The Company anticipates that further funds will be required for drilling, although funds hitherto earmarked for fracking Eblana-3 will significantly reduce the requirement.
The Tertiary play on the Company’s eastern leases, updip to the Eblana-1 and Eblana-3 wells is also considered highly prospective. The play appears to be analogous to Railroad Valley’s Trap Springs field and, subject to further data collection and analysis, may also provide promising targets for drilling.
Federal lease #87414 (the location of the Eblana-1 and Eblana-3 wells) and lease #87415 are set to expire on May 31 2019 if they do not produce oil in paying quantities. Since no drilling will take place before that date on Lease 87415, and the Company is not now proceeding with fracking operations on lease #87414, those leases will be relinquished. The above-named leases account for less than 7% of the Company’s total lease area.
The statements in this communication reflect the current thinking of the Board and the Company’s present plans. The Company reserves the right to alter plans in the light of developing knowledge and circumstances. Shareholders’ attention is drawn to the note below concerning Forward-looking Statements.
This press release contains certain “forward-looking statements” and “forward-looking information”. Forward-looking statements and forward-looking information include, but are not limited to, statements with respect to: business plans and strategies of US Oil and Gas; operating or technical difficulties in connection with drilling or development activities; availability and costs associated with inputs and labour; drilling and exploration costs; the speculative nature of oil exploration and development; diminishing quantities or quality of reserves; synergies and financial impact of completed acquisitions; the benefits of the acquisitions and the development potential of properties of US Oil and Gas; the future price of oil; supply and demand for oil; the estimation of reserves; the realization of reserve estimates; costs of production and projections of costs; success of exploration activities; capital expenditure programs and the timing and method of financing thereof; the ability of US Oil and Gas to achieve drilling success consistent with management’s expectations; net present values of future net revenues from reserves; expected levels of royalty rates, operating costs, general and administrative costs, costs of services and other costs and expenses; expectations regarding the ability to raise capital and to add to reserves through acquisitions, assessments of the value of acquisitions and exploration and development programs; geological, technical, drilling and processing problems; treatment under governmental regulatory regimes and tax laws.
All statements other than statements of historical fact are forward-looking statements
THE DIRECTORS OF THE COMPANY ACCEPT RESPONSIBILITY FOR THE CONTENTS OF THIS ANNOUNCEMENT
Neither this announcement nor the information contained herein constitutes an offer or solicitation by U.S. Oil and Gas Plc for the purchase or sale of any securities nor does it constitute a solicitation to any person in any jurisdiction where solicitation would be unlawful.
For further information contact:
Brian McDonnell, Chief Executive Officer +353 (1) 631 9022
About U.S. Oil & Gas:
U.S. Oil & Gas plc is an oil and gas exploration company with a strategy to identify and acquire oil and gas assets in the early phase of the upstream life-cycle and mature them. The Company’s
main asset is in Nye County, Nevada where it holds the entire share capital of US-based company, Major Oil International LLC (“Major Oil”). Major Oil has acquired rights to exploration and development acreage in Hot Creek Valley, Nye County, adjacent to the oil and gas rich Railroad Valley area of Nevada, both of which are part of the Sevier Thrust of central Nevada and western Utah, USA.
For further information please refer to our website at: www.usoiloilandgas.us