23 May, 2014 – U.S. Oil & Gas Plc.- Interim Results and Operations Update

U.S. Oil & Gas Plc.(“U.S. Oil” or the “Company”)Interim Results and Operations UpdateThe company is pleased to report its interim results for the six months ended
31 March 2014 and provide shareholders with an update on its activities during
the period under review and to date.

Financial Highlights:

* Administrative expenses amounted to $224,578 (2013: $604,365) reflecting
the decreased field exploration activities and continuing tight control on

* The cash position as at 31 March was $925,244 (excluding a VAT rebate due
of $29,490).

The Company has adequate finance to fund current operations (see below).
Further funds will be required for drilling and development of the Hot Creek
Valley field. Advanced discussions with potential investors and strategic
partners about additional funding, the further development of the Hot Creek
Valley asset, and other matters of potential advantage to the Company are
continuing. The Company believes that good progress is being made and will
report details in due course.

Operations Highlights:

* Geochemical survey and analysis define anomalies of 400 acres, 500 acres
and 4,400 acres

* Field Development Plan completed

* Basin and oil system models refined

* Study of Railroad Valley analogues underway

* Work programme finalised, including new well design

* Partnership / investment discussions continuing


The geochemical analysis of soil samples collected between October and January
2014 is now complete. The aim was to delineate alteration phenomena related to
vertical hydrocarbon seepage from potential oil and gas reservoirs at depth.
Methods included nine geochemical analyses; Magnetic Susceptibility (MS), High
Resolution Soil Spectral Analysis (HRSSA), Conductivity (umhos), Iodine,
hydrocarbons by UV-Vis Spectroscopy.

The primary purpose of the survey, carried out over the Company’s full 88 sq.km
lease area, was to:

a) Identify previously unknown potential oil and gas reservoirs;

b) Refine the surface mapping of previously identified anomalies;
c) Compare Hot Creek Valley signatures with signatures from Covenant, Trap
Springs, Eagle Spring and Lisbon fields to aid in discriminating areas with the
greatest drilling potential.

Survey Results

The larger sample in this study has allowed for a better understanding of the
mapped surface trends and their relationship to hydrocarbons seeping from
potential reservoirs. This finer resolution has confirmed the five geochemical
anomalies detected in the 2011 surveys of Hot Creek Valley, and these have been
subsumed into the larger anomalies identified in the current study. In
addition, a study of analogues with producing fields has enabled more precise
targeting of potential drill locations.

The cluster of northern anomalies are identified as A, B, and C. Together these
anomalies cover 500 acres or approximately 2.02 km2. Characteristics of Anomaly
A, B and C correspond to similar measurements at Covenant, Trap Spring, Eagle
Spring and Lisbon fields.

The anomalies to the south are identified as D and E. Together, these cover an
estimated 400 acres or approx. 1.62km2. This trend is geochemically apparent,
via the total field magnetics, and is detected by the gravity data. The
hydrocarbons are compositionally similar to A, B, and C, but the compositional
anomaly is larger in spatial extent and has an orientation of east to west.
Anomaly D is located at the crest of an anticlinal feature up dip from Anomaly
E. Anomaly E corresponds to the intersection of the two fault lines trending
South to South West and East-West previously reported (28 Feb. 2014) as
displaying an alteration pattern stronger than any detected elsewhere in the

The set of extremely high values to the east of the Hot Creek fault is
designated Anomaly F. Anomaly F is by far the largest anomaly so far
identified, covering an area of approximately 4,400 acres or 18km2 and yielding
a large number of extremely high values. Differentiating anomalies within F,
other than faults, as possible drilling locations will require additional
geological and geophysical data.

The circular character of the geochemical anomalies is consistent with those at
Railroad Valley, and the anomalies exhibit many of Railroad valley’s geological


A Field Development Plan (FDP) has now been completed for the Hot Creek Valley
property. The purpose of the plan was to test competing development scenarios,
including costs and project economics, to determine the optimal development
pathway for the field. The plan is currently being evaluated by potential
funding and investment partners.


All data collected to date have now been incorporated into 3D basin and oil
system models. The Company believes that significant progress has now been made
in understanding the compartmentalisation of structures within the lease area.

Drag Wave, VSP and 2-D seismic data will be integrated into the models as it
becomes available. As part of the process of refining the models, Forrest Garb
& Associates have undertaken further study of the Railroad Valley analogue
which will be integrated with Hot Creek Valley data. That study is underway.


An expanded US Oil technical team, led by Exploration Director Karim Akrawi,
has carried out an intensive planning and modelling exercise provisionally
identifying five potential drill locations. The team has also recommended a
sequence of four operational steps designed to further reduce risk and increase
the chances of a successful drill.

1. Vertical Seismic Profiling (VSP) with 3D Drag Wave will provide detailed
understanding of fluid dynamics within the identified compartments up-dip
of Eblana-1. Direct Reservoir Signature using the Drag Wave allows for a
more advanced geologic model of the reservoir as an active and nonlinear

2. A 2-D Line Seismic Survey will be carried out up-dip to define further the
structure local to

3. A new well design has been devised. Experience in drilling Eblana-1 in
accordance with regional industry practice revealed several important
deficiencies in methodology. The new well design therefore features altered
casing and also allows for drilling into the Palaeozoic zone. A Smart Well
is planned allowing for penetration of multiple compartments from the same

4. The strongest location indicated by the models will be drilled.

Current financial resources are sufficient to fund steps 1-3 outlined above;
data collection and analysis is expected to take approximately three months.
Step 4, drilling, is subject to successful funding and/or partnership
discussions, but it is hoped that drilling can take place in Q4 of 2014.


Consolidated statement of comprehensive income

For the six months ended 31 March

Six Months Six Months Year
Ended Ended Ended
Notes 31-Mar-14 31-Mar-13 30-Sep-13
$ $ $

Continuing Operations


Other Income 196 685 1,422

Administrative Expenses (224,578) (604,365) (1,600,536)

(Loss) before tax (224,383) (603,680) (1,599,114)

Income tax expense – – –

Loss for the period and total (224,383) (603,680) (1,599,114)
comprehensive loss for the period

Earnings per share (all

Basic and diluted loss per share 5.1 (0.54) (1.45) (3.84)

Consolidated statement of
financial position

31-Mar-14 31-Mar-13 30-Sep-13
Note $ $ $

Non Current Assets 5.2 5,093,338 4,714,912 5,089,878

Current assets

Debtors 41,558 87,418 187,416

Cash and cash equivalents 928,806 2,043,803 985,985

Total assets 6,063,701 6,846,133 6,263,279

Equity and liabilities


Ordinary Share Capital 5.3 5,670 5,670 5,670

Share Premium 5.3 9,742,553 9,742,553 9,742,553

Share Based Payments Reserve 168,305 – 168,305

Retained Earnings (4,167,705) (2,947,887) (3,943,322)

Equity attributable to the owners 5,748,823 6,800,336 5,973,206
of the Company

Current Liabilities

Trade & Other Payables 314,878 45,797 290,073

Total liabilities 314,878 45,797 290,073

Total equity and liabilities 6,063,701 6,846,133 6,263,279

Consolidated statement of changes
in equity

Ordinary Share Share Retained Total
Share Premium based losses
Capital payments
$ $ $ $ $

Balance at 1 October 5,670 9,742,553 – (2,344,208) 7,404,015

Loss for the Period – – – (1,599,114) (1,599,114)

Share based payments 168,305 168,305

Balance at 30 5,670 9,742,553 168,305 (3,943,322) 5,973,206
September 2013

Balance at 30 5,670 9,742,553 168,305 (3,943,322) 5,973,206
September 2013

Loss for the Period – – – (224,383) (224,383)

Share based Payments – – – –

Balance at 31 March 5,670 9,742,553 168,305 (4,167,705) 5,748,823

Consolidated Statement of Cash Flows

Six Months Six Months Year
Ended Ended Ended
31-Mar-14 31-Mar-13 30-Sep-13
$ $ $

Cash flows from operating activities

(Loss) for the year (224,578) (604,365) (1,600,536)

Other Movements – – 168,305

Movements in working Capital

Decrease/(increase) in trade and other 145,858 206,935 106,936

(Decrease)/Increase in trade and other 24,805 (309,468) (65,193)

Cash used in operations (53,915) (706,898) (1,390,488)

Interest Paid – – –

Net cash (used) in operating activities (53,915) (706,898) (1,390,488)

Cash flows from investing activities

Interest Received 196 685 1,422

Payments for exploration and evaluation (3,460) (767,713) (1,142,679)

Net cash used in investing activities (3,264) (767,028) (1,141,257)

Cash flows from financing activities

Proceeds from issues of equity shares – – –

Net (decrease) / increase in cash and (57,179) (1,473,927) (2,531,745)
cash equivalents

Cash and cash equivalents at the 985,985 3,517,730 3,517,730
beginning of period

Cash and cash equivalents at end of 928,806 2,043,803 985,985

5 Notes to the Interim Financial

5.1 Loss per share

The calculation of basis loss per ordinary share is based on the loss per
year and the average number of ordinary shares in issue during the
relevant year as set out below. There is no difference between the diluted
loss per share and the basic loss per share.

Six Months Six Months Year
Ended Ended Ended
31-Mar-14 31-Mar-13 30-Sep-13
$ $ $

Loss for period (224,383) (603,680) (1,599,114)

Weighted average number of shares 41,682,356 41,682,356 41,682,356

Basic & Diluted (Loss) per share (0.54) (1.45) (3.84)

5.2 Exploration and Evaluation Assets Nevada, Total
$ $


At 1 October 2011 746,471 746,471

Additions 3,968,441 3,968,441

At 30 September 2012 4,714,912 4,714,912

Additions 374,966 374,966

At 30 September 2013 5,089,878 5,089,878

Additions 3,460 3,460

At 31m March 2014 5,093,338 5,093,338

Net Book Value

At 30 September 2013 5,089,878 5,089,878

At 31 March 2014 5,093,338 5,093,338

Expenditure on exploration activities is deferred on areas of interest
until a reasonable assessment can be determined of the existence or
otherwise of economically recoverable reserves. No amortisation has been
charged in the period. The directors have reviewed the carrying value of
the exploration and evaluation assets and consider it to be fairly stated
and not impaired at 31 March 2014. The recoverability of the exploration
and evaluation assets is dependent on the successful development or
disposal of oil and gas in the Group’s licence area.

5.3 Share Capital Six Months Six Months Year
Ended Ended Ended
31-Mar-14 31-Mar-13 30-Sep-13
$ $ $

Authorised equity

20,000,000,000 ordinary share of € 2,854,000 2,854,000 2,854,000

Issued Share Capital Number Ord Share Share
Fully paid ordinary shares of shares Capital Premium
# $ $

Balance at 1 October 2011 41,398,337 5,634 7,995,577

Issue of shares for cash 284,019 36 1,946,976

Balance at 30 September 2012 41,682,356 5,670 9,942,553

Issue of shares for cash

Balance at 30 September 2013 41,682,356 5,670 9,942,553

Issue of shares for cash

Balance at 31 March 2014 41,682,356 5,670 9,942,553

As part of an agreement entered into in 2009, 1,341 shares in U.S. Oil and Gas
distributed by Spurt Concepts Ltd as part of the distribution agreement in the
name of Brian McDonnell have been distributed to a third party. Brian
McDonnell’s total shareholding is now 3,913,234.

US Oil CEO Brian McDonnell said:

`I am pleased to be able to report significant progress in the Hot Creek Valley
project. We have a highly experienced and focussed technical team working on
all aspects of the exploration programme. After intensive data collection,
analysis and modelling activities, we are confident we are reaching a
comprehensive understanding of the multiple potential hydrocarbon-bearing
structures contained in the valley. We have a clear work programme established,
elements of which are already underway and all of which we expect to see
completed in the near future. Subject to final local surveys and a successful
outcome to our ongoing discussions regarding financing, we are on track to
drill our next well this year. We are enormously excited with our discovery and
believe that the recent analysis is indicating potential beyond anything
previously envisaged.’


For further information contact:

Brian McDonnell, Chief Executive Officer +353 (0) 1 6319022
Alexander David Securities Ltd – Corporate Finance Adviser
Fiona Kinghorn/David Scott +44 (0) 20 7448 9800

GXG Markets
Simon Kiero-Watson +44 (0) 20 7653 1935
[email protected]
Alex Benger +44 (0) 20 7653 1935
[email protected]

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