U.S. Oil & Gas Plc.
(“US Oil” or the “Company”)
- Data continues to support strong prospectivity for East and West Plays
- Tertiary East Play currently believed the best near-term candidate for drilling
- Data analysis and modelling for an East Play prospect almost complete
- Subject to satisfactory completion of target assessment, expectation of drilling Q1 2020
U.S. Oil & Gas Plc, (“USOIL” or the “Company”), the oil and gas exploration company with assets in Nevada, is pleased to update shareholders on its operational progress.
The Company’s belief that both West and East Plays on its Hot Creek Valley leases are highly prospective continues to be supported by newly acquired geochemical and magnetic data, by reprocessed seismic data and by an intensive programme of data analysis and modelling. The overall objective is to assess prospectivity for a multi-well development programme on both plays. However, the immediate objective is to confirm potential targets suitable for drilling in the shortest possible time frame and within the available budget.
The assessment process is furthest advanced for the Tertiary East Play, a likely analogue of Railroad Valley’s producing Trap Spring field. While the advancement of the West Play requires additional 2-D seismic data, the East Play has benefited from existing high quality legacy seismic lines, recently reprocessed. This data, integrated with the large volumes of excellent data collected from the Eblana-1 and Eblana-3 wells, is currently being integrated with existing and new geochemical, VSP, and additional, newly acquired, magnetic data.
Risk assessment addressing all the factors bearing on commercial success in the East Play is advancing. Current work is focussed on two horizons of interest to confirm that continuity exists between these horizons and oil-bearing zones found in Eblana-1 and Eblana-3. Analysis is currently focussed on confirming that porosity and permeability are, as currently indicated, likely to prove favourable, and that the trap is secure. The Company believes that remaining uncertainties will shortly be resolved. Positive indications would allow a new Application to Drill to be finalised and/or an existing drill permit to be transferred subject to agreement by the relevant authorities.
If the geologic assessment continues to support drilling on the East Play locations identified, the Company expects it will drill a Tertiary target there before carrying out further assessment of the Palaeozoic West Play. Currently the Company does not expect to require a new 2-D seismic survey for the East Play. That view will be subject to confirmation in the coming few weeks. However, planning for a potential survey is complete, and the programme could be initiated at any time.
The Company is fully funded for an East Play drill, based on current assumptions and available information about costings. Preparations for submitting the necessary Application to Drill the East Play, including well design and other elements, are advanced.
The Company had hoped it might be possible to drill in Q4 of 2019, but the complexity of the geological challenge has slowed progress. The Company’s priority has been to aim for thoroughness in its geological assessment rather than accept unnecessary risk for the sake of marginally more rapid progress. Thus far, all analyses of the potential target structure in the East Play have given positive indications of significant potential for commercial success. The remaining uncertainties are now being addressed, and the Company is confident it will soon be able to make a definitive statement about an intention to drill in the location under study. If that pronouncement is positive, an expectation of a drill or drills in Q1 of 2020 is reasonable, subject to regulatory permissions.
Plugging of water wells and site remediation
The plugging of the water wells associated with Eblana-1, Eblana-3 and Eblana-6 are scheduled to be carried out between the second and third week of November, 2019. Site remediation will follow thereafter.
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.usoilandgas.us