27 April, 2018 – U.S. Oil & Gas Plc. – Consolidated Audited Annual Results for Period Ended 31 July, 2017


U.S. Oil & Gas Plc.

(“U.S. Oil” or the “Company”)

Consolidated Audited Annual Results for Period Ended 31 July, 2017

The Company is pleased to report its consolidated annual results for the year period ended 31 July 2017.

Corporate Highlights

– Funds raised $2.753 M

Operational Highlights

– 3D Structural Modelling Complete
– OOIP Best Estimate for the Tertiary Eblana Structure is over 1 billion barrels Contingent Resources
– Recoverable Contingent Oil Best Estimate is 206.6 million barrels

Financial Highlights

– Administration expenses $750,849 (2016: $808,748). The increase in expenditure was primarily due to increased exploration activity over the period and loss on currency movements.

– Total comprehensive loss $750,898 (2016: $808,279); and cash and cash equivalents $3,274,903 (2016: $1,204,719). As a result of VAT refunds the cash and cash equivalents on hand as at 31 July 2017 amount to circa $1.1m. The Company is debt-free.

Review of the year ended 31 July 2017

Industry environment
Throughout the period, turbulence in the oil industry caused by a precipitous drop in the oil price led to extreme risk aversion on the part of investors and potential industry partners. The Company took the view that the best way forward was to make independent operational progress until such time as the oil price and industry confidence recovered.

The Company’s primary objective is to raise a portion of its Contingent Resources to Proven Reserves by planning and drilling an additional well or wells. The data collected by drilling and further surveying activity will also enhance understanding of the wider prospect in Hot Creek Valley.

Operational progress
The Company contracted Halliburton to carry out a Vertical Seismic Profile (VSP) survey based on US Oil’s Eblana -1 discovery well, and Baker Hughes (BHI) to carry out structural modelling based on all the data collected to date including VSP data. The purpose of the structural modelling was to reduce risk as far as possible before further drilling. In addition, Baker Hughes calculated revised Oil-In-Place estimates for the Tertiary structure updip of the Eblana-1 well.

The results of VSP and modelling exercises were highly encouraging. Of two previously identified Tertiary structures in range of VSP, both were confirmed, as was the direction of updip. It was also determined that the Palaeozoics rise sharply to the west.

Baker Hughes’ revised Oil-In-Place estimates were a significant upgrade to those reported by the Company in 2013. The Baker Hughes model estimated Original Oil-in-Place (OOIP) for the Tertiary zones updip to the Eblana-1 well as 283 million barrels (low case); 1,033 million barrels (best case); and 1,993 million barrels (high case). They also reported estimated Recoverable Resources (at 20% recovery factor) as follows: 57 million barrels (low case); 207 million barrels (best case); and 400 million barrels (high case).

The primary purpose of the Baker Hughes structural modelling exercise was to reduce risk by identifying and locating the potential hydrocarbon-bearing zones to be targeted. Four Tertiary zones and two Palaeozoic zones were considered the most promising. Further studies confirmed one target within the range of displacement drilling from the Eblana-1 drillpad (designated Eblana-1A) and two targets to be drilled by vertical wells designated Eblana-3 and Eblana-6.

Fund raising
During the financial year, the company raised funds in an Open Offer and three Placings. The Company raised $2.753K issuing 8,248,652 new Ordinary Shares at between £0.27 and £0.30. These fundraisings placed the Company in a strong financial position to move forward on both operational and corporate fronts.

The funds raised will allow for the drilling of up to two wells.

Outlook and post balance sheet events
In spite of a challenging industry environment, the Company has shown itself capable of developing an appropriate forward-looking strategy, raising funds, and making significant operational progress. In September 2017 the Company raised an additional $748k in working capital, further underpinning its planned exploration programme.

Recently, the international oil price has shown signs of a sustained recovery and possibly an upward trajectory. In addition, the industry has become increasingly aware of a dearth of new oil finds due to constrained investment during the downturn. This may bode well for exploration projects in pioneer regions such as Nevada. The low potential cost of conventional production from Hot Creek Valley could also prove an attractive proposition, given that extraction costs for competing shale plays are high, and shale demands continuous capital investment to maintain production.

In late 2017, the Company reported the results of additional geochemical surveying extending over its entire concession. Results indicate a high potential for hydrocarbons throughout the Hot Creek Valley concession and confirm the Company’s view that its leases cover a major oil system. The company is also carrying out further geological modelling based on all data collected to date, focussing on the wider concession area. The purpose is to inform a comprehensive exploration plan aimed at identifying all significant potential hydrocarbon-bearing structures on its Hot Creek Valley leases. This planning underpins a strategy aimed at developing the necessary corporate, technical and resource capabilities to fully explore and develop the asset.

As of 12 January 2018 all permits required for the wells designated Eblana-3 and Eblana-6 were approved by the US Dept. of the Interior Bureau of Land Management (BLM) and the Nevada Division of Minerals (NDOM). The permit application for the well designated Eblana-1A, a more complex project, is still in process with the relevant authorities.

As of 26 January 2018, site preparations for the drilling of Eblana-3 and Eblana-6 including the setting of the conductor pipes and the drilling of a water well are almost complete. Discussions with drilling contractors are underway to finalise arrangements. The Company expects drilling to take place in Q1 2018.

Brian McDonnell


Consolidated Statement of Comprehensive Income for the year ended 31 July 2017

31 Jul ’17 31 Jul ’16
Notes US$ US$
Continuing Operations
Administrative expenses -750,849 -808,748
_________ _________
Operating loss -750,849 -808,748
Finance Income 5 61 582
Interest payable
and similar charges 6 -110 -113
_____ ______
Loss for the year/period before taxation 4 -750,898 -808,279
Income tax expense 9 – –
_________ _________
Loss for the year from the continuing operations -750,898 -808,279
_________ _________
Other Comprehensive Income
Loss for the year from the continuing operations -750,898 -808,279
Foreign exchange movement 166,704 36,717
_________ _________
Total Comprehensive Loss for the year -584,194 -771,562
_________ _________
Loss attributable to:
Equity holders of the Company -750,898 -808,279
_________ _________
Total Comprehensive Loss attributable to:
Equity holders of the Company -584,194 -771,562
_________ _________
Earnings per share from continuing operations
Basic and diluted loss per share (cent) 10 -1.52 -1.86
_________ _________
Consolidated Statement of Financial Position

as at 31 July 2017

31 Jul ’17 31 Jul ’16
Notes US$ US$
Non-Current Assets
Intangible Assets 11 5,173,729 5,173,729
_________ _________
Total Non-Current Assets 5,173,729 5,173,729
_________ _________
Current Assets
Trade and other receivables 13 124,747 90,143
Cash and cash equivalents 14 3,274,903 1,204,719
_________ _________
Total Current Assets 3,399,650 1,294,862
_________ _________
Total Assets 8,573,379 6,468,591
_________ _________
Capital and Reserves
Share capital presented as equity 16 7,074 6,194
Share premium 16 14,598,277 11,845,890
Other reserves 335,111 205,124
Retained loss -6,496,048 -5,745,150
_________ _________
Attributable to owners of the Company 8,444,414 6,312,058
_________ _________
Total Equity 8,444,414 6,312,058
_________ _________
Current Liabilities
Trade and other payables 15 128,965 156,533
_________ _________
Total Current Liabilities 128,965 156,533
_________ _________
Total Liabilities 128,965 156,533
_________ _________
Total Equity and Liabilities 8,573,379 6,468,591
_________ _________
The accompanying notes on pages 24 to 41 form an integral part of these financial statements.

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


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.usoil.us