10 March 2016 - U.S. Oil & Gas Plc. - Operations update
U.S. Oil & Gas Plc.
("U.S. Oil" or the "Company")
Operations Update and Intention to Drill
In a May 2013, an independent Competent Person’s Report (CPR) by Forrest A. Garb & Associates (FGA) of Houston, Texas, estimated 19.2 million barrels Contingent Resources (C50) for a portion of the Company’s lease area in Hot Creek Valley Nevada. Since then, the Company’s stated intention has been to achieve Reserves status for some part of those estimated Resources. The Board believes that Reserves would significantly improve the Company’s position in terms of finalising an industry partnership to fund large-scale exploration and development of the Hot Creek Valley property.
To enable the planned operations described below to be undertaken, the Company will need to raise additional funds . Details of how this may be achieved will be set out in due course in a separate announcement. The intentions described below are contingent on sufficient funds being raised. If sufficient funds are raised, the Company anticipates it will be able to commence drilling operations in early Summer 2016.
Background to the operational plan
Results from the Gravity Magnetic and Geochemical surveys of Hot Creek Valley, including the area around the Eblana #1 well, were reported by the Company in May 2014. The data collected were analysed to develop further the geological model and provided invaluable structural information for provisional targeting of the next drills. An intensive process of independent analyses and technical reporting then focussed on the geophysical structures updip to the discovery well Eblana #1. Extensive preliminary area modelling has recently been carried out by Halliburton in advance of a planned Vertical Seismic Profile (VSP) survey.
Based on its studies, the Company’s intention, subject to funding, is to re-enter the Eblana#1 well, offsetting the drill depending on the results of the planned VSP survey. The well will be drilled to a greater depth than previously to penetrate Palaeozoic strata . A second well may also be drilled if sufficient funding is available. The currently depressed price of drilling and services at this time offers a valuable opportunity for highly cost-effective operations.
The geological, geophysical and petrophysical studies described above culminated in a report and recommendation to the Board on 14th October 2015. Applications for the necessary permissions were submitted to State and Federal authorities on 28th October 2015. Six permissions were required and applied for, four have been granted and two remain to be awarded.
Site preparation is currently underway at Eblana #1. The access road has been repaired after winter damage. A completion rig is onsite and has removed tubing, prepared the well, run a cement bond log and acquired preliminary well control data in preparation for drilling operations.
Stock Exchange Listing
The Board’s intention is to obtain a trading facility for the Ordinary Shares on a suitable market, and it continues to explore this objective. Although the Board hopes a listing can be achieved in the near future, there can be no certainty about how long this may take. Nor can a successful outcome be guaranteed. It is important to note that listing is contingent on satisfying working capital requirements amongst other factors.
Brian McDonnell, CEO of U.S. Oil said:
‘Given the turmoil afflicting the oil sector at present, and the difficulty in finalising an industry partnership in the current conditions, the Company has decided to press on to drill independently if sufficient funds can be raised. We remain confident in the viability and value of our asset as a conventional resource with, potentially, extremely low uplift costs. We are equally confident that this advantage will in due course be recognised by the wider industry.’
THE DIRECTORS OF THE COMPANY ACCEPT RESPONSIBILITY FOR THE CONTENTS OF THIS
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
Alexander David Securities Ltd - Corporate Finance Adviser
David Scott +44 (0) 20 7448 9820
James Dewhurst +44 (0) 20 7448 9820
Definitions: The terms ‘Reserves’ and ‘Contingent Resources’ are as defined in the ‘Petroleum Resources Management System’ of the Society of Petroleum Engineers.
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