U.S. OIL and GAS plc's (Ticker: USOP) core activities are in the USA, with ongoing exploration activity in Nevada where the company holds a large lease acreage.

The Investment Case

  • US Oil has confirmed the first discovery of light sweet crude oil in Nevada in approximately 30 years.
  • After a review of petrophysical parameters, Baker Hughes Inc. have reported revised Original Oil-in-Place estimates for the Tertiary zones in the area updip to the Eblana #1 well as follows:  Original Oil in Place (OOIP) is 283 million barrels (low case); 1,033 million barrels (best case); and 1,993 million barrels (high case).  Recoverable Resources at 20% recovery factor are as follows:  57 million barrels (low case); 207 million barrels (best case); and  400 million barrels (high case). 
  • The Company is funded to drill two wells while at the same time preserving  12 months working capital. Planning is complete for three wells, of which two will be drilled.  Two of the planned wells (Eb-1a and Eb-3) target updip Tertiary zones with the possibility of drilling deeper to the Paleozoics.  One planned well (Eb-6) is sited optimally for the Paleozoics and would in addition penetrate Tertiary zones of interest.  Eb-3 and Eb-6 are vertical wells.  Eb-1a is deviated (sidetracked) and will be drilled from the existing Eblana #1 well pad.  
  • In 2016 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 available data including VSP. The purpose of the structural modelling was to reduce risk as far as possible before the Company carries out its plan to re-enter the Eblana #1 well and sidetrack to identified targets. In addition, Baker Hughes calculated the revised Oil-In-Place estimates reported above for the Tertiary Structure updip of the Eblana #1 well.  These estimates do not include the Palaeozoic strata, which may also be highly prospective.
     
  • The Eblana #1 exploration  well,  drilled by U.S. Oil's wholly owned subsidiary Major Oil International LLC, identified  nine  large  potential porous oil reservoir intervals and  associated  high fracture  zones before reaching its target depth of 8,550 feet on 26th May 2012.  Testing confirmed two producer zones, approximately 150 feet cumulative net pay, and identified oil of 33 and 28.5 API. 
  • US Oil’s lease area is close to the highly productive oil field at Railroad Valley (10 miles) and is believed to be geologically comparable in exploration terms.
  • The unit cost of extracting oil in Nevada  is amongst the lowest anywhere.  The Hot Creek Valley lease area is close to a highway and two refineries.   As a result, the viability of the field is minimally sensitive to the oil price.
  • US OIL's discovery in the US, the world’s largest oil market,  is situated in one of the most politically stable, well regulated  and secure exploration areas in the world.
  • US Oil & Gas has, compared to oil explorers with similar achievements, a low number of shares in issue.