U.S. Oil and Gas Plc
(“US Oil” or “the Company”)
U.S Oil and Gas Plc (GXG: USOP) (the “Company”), the oil and gas exploration Company with
exploration assets in Nevada, makes the following Operations update.
Eblana 1 Operational Update
Pause of Eblana 1 testing and planned resumption
Extensive data acquisition and sampling has been carried out on Eblana 1, and the well has been temporarily suspended until advanced analysis of the results is complete. The Company intends to resume testing in November or early December 2012, subject to supplier contracts, and expects to engage a major contractor and flow specialists.
Of the 11 pay zones identified during the Ebana 1 drill of May / June 2012, 30 zones were tested (approximate total 400 ft, with small perforated intervals each 6 to 20 ft thick). The testing programme did not include potential zones from 3,000 to 4,500 feet. Zones below 8,000 feet were initially tested together.
Of the 30 zones tested, twenty six were formation water (or dry & tight zones) with some traces of oil, while two zones brought oil to the surface. The two potential zones were at the edge of the oil/water contact. However, a consistent natural flow could not be achieved. There was also insufficient time available to clear the productive formations.
Nevertheless, two zones with Gross Formation Thickness of 380 ft (min. 150 ft NPZ) with average effective porosity of 19% (total porosity of 22 – 24%) were confirmed as oil bearing zones, and an initial low flow rate through the tubing to the surface was achieved. The Company believes that flow was impeded by a high paraffin wax content and kerogene in the formation.
A range of stimulation techniques will be considered when the workover resumes. Further perforation of the producer zones will also be carried out. Another two potential zones at shallower depths (above 4,500 feet) also remain to be tested and may be included in the completion programme.
Competent Persons Report (CPR)
A comprehensive evaluation programme and detailed analyses are being carried out to further understand the lithology, stratigraphy and the formation fluids associated with Eblana 1. This information will be used to calibrate the existing data set. Forest Garb & Associates, international petroleum consultants, have been asked to produce an updated CPR in the light of the large volume of data collected and will report a resource update when this evaluation is complete.
Further analysis of the Eblana 1 data may result in the Company adjusting the drilling priority of Eblana 2 and Eblana 3. The market will be updated when a decision is reached.
CEO Brian McDonnell said, ‘It became clear as the workover progressed that the distinctive characteristics of the local geology were making interpretation of our original drill data problematic. Nevada has defeated many oilers, but we are pleased to be able to say that we have nevertheless succeeded in confirming our discovery and collecting large amounts of immensely valuable data. We are confident that, with an updated reservoir model and deploying further techniques, we will succeed in flowing the primary zones we have identified.’
Eblana 1 workover details:
The well was cleared of debris, circulated and cleared of formation completion fluids.
A number of zones were tested, but it became apparent that the first perforation interval (5,600ft or more) was communicating through a micro annulus. It was decided to cement the well, drill out excess cement and secure.
Zones were perforated and tested.
Weeks 6 -10:
Perforation was completed, and all remaining zones were tested. Oil flowed to the surface from two of these zones.
American Depositary Receipts (ADRs)
The Company is working to complete the process of establishing ADRs as a priority.
THE DIRECTORS OF THE COMPANY ACCEPT RESPONSIBILITY FOR THE CONTENTS OF THIS ANNOUNCEMENT
For further information contact:
Brian McDonnell, Chief Executive Officer +353 (0) 87 238 3419
Alexander David Securities Ltd – Corporate Finance Adviser
Fiona Kinghorn/David Scott +44 (0) 20 7448 9800
Jonathan Charles +44 (0)779 189 2509
Simon Kiero-Watson +44 (0) 20 7653 1935
Alex Benger +44 (0) 20 7653 1935
Notes to Editors
U.S. Oil & Gas plc is a GXG quoted (Ticker: USOP) 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.usoil.us