1 March 2013 - U.S. Oil & Gas Plc - Operations Update
U.S. Oil & Gas Plc.
("U.S. Oil" or the "Company")
- Consistent flows established
- Two producer zones confirmed
- Two grades of oil so far identified, including condensate
- Testing indicates sweet crude oil of API 28.5 and API 33
- Testing to be paused for data analysis and resumed on completion of analysis
- ADR preliminaries completed
U.S. Oil & Gas Plc (GXG:USOP), the oil and gas exploration company with exploration assets in Nevada, is delighted to announce that it is achieving consistent flow from its Eblana 1 well in Hot Creek Valley. Although current indications are that the well may prove to be commercial, the Company wishes to emphasise that testing is still at an early stage and no
headline flow rates are available at this point.
The Company intends pausing testing in early March in order to complete further data analysis. It expects to resume testing within eight weeks.
In a 48-hour pump-assisted hydraulic swabbing and downhole pump test, one of the zones, found between 7,000 and 7200ft, produced a continuous flow of crude oil and water. Laboratory results have confirmed the crude oil from this zone is 28.5 API with a trace of contaminants and no hydrogen sulfide. A second interval has produced light crude oil and water with an API of 33. The zone of origin is currently being identified.
During circulation bottom up, there was a clear indication of condensate from one zone, the source of which will be determined following analysis and further testing.
In addition to the proven discovery area, the current testing programme has also confirmed an additional 8-10 potential drilling locations for several prospective pools to the south and south west of Eblana 1 and within the US Oil lease area in Hot Creek Valley.
The next stage will involve further data analysis and planning to guide future perforation within the flowing zones in order to confirm stabilized production rates and maximize production.
The Company wishes to emphasise the critical importance of taking the necessary time for this preparation before commencing further testing. The geology encountered has proved extremely complex, as expected in Nevada, and a careful and systematic approach has been taken. The Company is pleased to report that its operations have been highly efficient, and it is confident that it is gaining a thorough understanding of the productive reservoir zones.
American Depositary Receipts (ADRs)
U.S. Oil and Gas plc has appointed Deutsche Bank Trust Company Americas as depositary bank for its proposed American Depositary Receipt (ADR) programme, and that it has reached an agreement in principle with Deutsche Bank regarding the terms of the ADR programme. Further details will be announced.
Commenting on developments, CEO Brian McDonnell said, "Although the testing of Eblana 1 is ongoing, we are enormously encouraged by the results so far. We have a producing well which, subject to further testing, we believe may prove commercial. For a first exploration well in an unproven location this is a remarkable result, and we are delighted by the achievement. The issuing of ADRs will also be a significant step forward for the Company."
The Company confirms that it is in compliance with all Nevada Division of Minerals and Bureau of Land Management regulatory requirements.
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 (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