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.

30 March, 2011 US Oil and Gas plc - Maximum Recoverable Oil Reserves of 113 Million Barrels for Eblana Phase 1, Funding Round Completed.

30 March 2011

U.S. Oil and Gas PLC

("USOIL" or "the Company")

 

Maximum Recoverable Oil Reserves of 113 Million Barrels for Eblana Phase 1, Funding Round Completed.

Highlights:

·    Volumetric Analysis estimates maximum quantity of crude oil commercially recoverable in USOIL's Eblana Phase 1 is 113 million barrels

·      Funding of up to circa $8.5m (£5.3m) raised and in place

·      Fully financed for upcoming drilling programme and detailed preparations for spudding-in are complete

Reserves:

U.S. Oil & Gas (PLUS: USOP), the oil and gas exploration company with its main asset in Nevada, USA, is pleased to announce a preliminary estimate of oil in place (“OOIP”) based on a report from Akrawi et al. The analysis uses a probabilistic approach incorporating structural volumetric capacity yielded by Infrasonic Passive Differential Spectroscopy (IPDS) and supported by other survey methods.

Results show total Prospective Resources (Maximum Possible OOIP Estimates) of 187 million barrels with a maximum value of Recoverable Possible Reserves of 113 million barrels.  Expected Probable Recoverable Reserves for USOIL's Eblana Phase 1 survey and catchment area, covering less than 25% of the lease area, are 47 million barrels.

Funding:

The company is also pleased to announce that it has today placed 5,831,830 new ordinary shares of EUR 0.0001 each (the "Placing Shares") at an issue price of 36 pence per share (the "Placing"), representing a discount of approximately 26% to the average share price over the previous month.  The Placing has raised proceeds of approximately $3.35m (£2.1m) in equity funding.

In addition, the Company has signed Heads of Terms to put in place a secured convertible loan note facility of up to $5.1m (£3.2m).  A further announcement will be made once a loan note agreement has been entered into.

The combined funding potentially available to the company via the Placing and the convertible loan note facility will be up to $8.5m (£5.3m), which is intended to fully finance the Company’s drilling programme.The Company has also today allotted 34,445 new ordinary shares of EUR 0.0001 each (the "Commission Shares") to CFS Independent Limited, at an issue price of 36 pence per share, in lieu of placing commissions.

USOIL's Chief Executive Officer, Brian McDonnell, said: "The estimate of expected recoverable oil for Eblana Phase 1 and surrounding areas has exceeded our expectations, especially in view of the extremely high rates and low cost of recovery shown in nearby Railroad Valley. With our technical evaluation complete and funding in place, we are now in a position to finalise our preparations. We expect to be announcing our well-drilling contractor and spudding-in date in due course.”

Director Shareholdings:

The following table sets out details of the changes in Director shareholdings and the changes in the percentage of voting rights held by Directors, subsequent to the Placing and the allotment of the Commission Shares.

 NameNumber of Ordinary Shares held prior to the Placing and the allotment of the Commission SharesNumber of Ordinary Shares held after the Placing and the allotment of the Commission SharesPercentage of the voting rights in the issued ordinary share capital of the Company prior to the Placing and the allotment of the Commission Shares (%) Percentage of the voting rights in the issued ordinary share capital of the Company after the Placing and the allotment of the Commission Shares (%) James T Guiry 1,23,216,4563,216,45610.15%8.57%Brian J McDonnell 1,3,4

5,094,091

5,144,091

16.08%

13.70%

Christopher K Comerford100,000100,0000.32%0.27%

 

1. Included in Brian McDonnell and James T. Guiry's holdings are shares owned by Spurt Concepts Limited, a company of which Brian McDonnell and James T. Guiry are shareholders and directors.

2. James T. Guiry's holding includes ordinary shares held by his wife, Margaret Guiry, via both joint and several holdings.

3. Included in Brian McDonnell's holding is the holding of Carrefour Training and Development Ltd., a company of which Brian McDonnell is a shareholder and director.

4. Brian McDonnell's holding includes ordinary shares held by his father, Bernard McDonnell, (who purchased 50,000 shares in the Placing).

The above interests relate to legal and beneficial holdings.

 

Orderly Market Agreement:

Niall Ring, a former director, who holds 2,000,000 ordinary shares, has undertaken in respect of 1,900,000 of those shares that, subject to certain conditions, he will make disposals only through the Company's broker.

 

Shares in Issue:

All Placing Shares and Commission Shares will rank pari passu in all respects with the existing fully paid ordinary shares.  The Placing Shares, Commission Shares and the existing ordinary shares each have one right to vote per share. Following the Placing and the allotment of the Commission Shares the total issued share capital of the Company will increase to 37,541,082 ordinary shares.

The above figure may be used by the shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to, their interest in the Company.  The Company's total issued share capital is now €3,754.11.

 

--- ENDS ---

 

THE DIRECTORS OF THE COMPANY ACCEPT RESPONSIBILITY FOR THE CONTENTS OF THIS ANNOUNCEMENT

 

For further information contact:

U.S. Oil and Gas plc

Brian McDonnell, Chief Executive Officer+353 (0) 872383419

 

SVS Securities plc - PLUS Corporate Adviser

Peter Ward / Alexander Brearley+44 (0)20 7638 5600

 

SVS Securities plc – Broker

Ian Callaway / Alex Mattey+44 (0)20 7638 5600

ian.callaway@svssecurities.com

 

Notes to Editors

USOil and Gas plc is a PLUS (Ticker: USOP) listed 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 in to marketable opportunities for the medium and large-sized oil companies. The Company's main asset is in Nye County, Nevada where it holds the entire share capital of the US-based company Major Oil International LLC. Major Oil has acquired, and intends to acquire, rights to exploration and development acreage in two high potential resource areas 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

U.S. OIL AND GAS PLC