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13 January, 2017 - U.S. Oil & Gas Plc - Resource Estimates Update

U.S. Oil & Gas Plc.

("US Oil" or the "Company")

Resource Estimates Update

U.S. Oil & Gas Plc, the oil and gas exploration company with assets in Nevada, makes the following announcement:

Highlights:

Structural modelling report for US Oil’s Hot Creek Valley Prospect by Baker Hughes complete
OOIP Best Estimate for the Tertiary Eblana Structure is over 1 billion barrels Contingent Resources
Recoverable Contingent Oil Best Estimate is 203.4 million barrels
Estimates for full lease acreage in preparation by Baker Hughes
Structural modelling of US Oil’s Hot Creek Valley Prospect by Baker Hughes is complete. The Board and the Company’s technical team are now studying the findings, and further details will be communicated to shareholders in due course. In the meantime, Baker Hughes’ revised Oil-In-Place estimates can be reported. These are a significant upgrade on the previous estimates reported in 2013.

For four zones of the Tertiary Eblana Structure, Oil-In-Place estimates and Recoverable Oil are as follows:
OOIP (MMBBl)
Low case Best case High case
TZ1 185 677 1214
TZ2 8 29 58
TZ3 9 40 83
TZ4 72 271 539
OOIP (millions barrels) 274 1017 1894

TOTAL RECOVERABLE CONTINGENT OIL RESOURCES (millions bbls
at 20% recoverability) 54.8 203.4 378.8

Zones TZ2 and TZ4 flowed oil on previous tests.

Background
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. Baker Hughes is currently working on revised Oil-In-Place estimates for the Company’s full 88 sq km lease acreage, and these will be reported in due course.

Work programme
The Company is now moving forward rapidly with its corporate and operational agendas. The Board and the US Oil technical team will now take time to study the Baker Hughes report. Meanwhile, discussions with drilling contractors are taking place, and a detailed drill plan is being prepared.

Fundraising efforts continue with the primary aim of maximising resources for drilling operations.

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
Alexander David Securities Ltd - Corporate Finance Adviser
David Scott +44 (0) 20 7448 9820
James Dewhurst +44 (0) 20 7448 9820
Email: james.dewhurst@ad-securities.com

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.

The BoD are looking to re-list plus have more news due on their acreage in Nevada. Relatively few shares in issue, circa 50m, and with the possibility of a few new shares being issued to help fund further drilling. I have owned these for some time and haven't tried to buy more via any grey market. That may be a possibility or directly from the company. The Baker Hughes and Halliburton information seems reassuring and there is more to come.

Surprised no interest in this company. Looks like a small fund raising followed by a few sidetrack drills and further Baker Hughes evaluation of remaining acreage before a sale to a bigger player.with already between 50m and 400m barrels of conventional oil on just one square kilometre and the prospect of a lot more on the remaining 87 sq kms. There are only just over 50m shares in issue. The potential upside looks terrific and whether that optimism is justified will be known in a matter of months.

The Sunday Times
February 12 2017, 12:01am,

US Oil & Gas drills for investors to develop €11bn Nevada oilfield
Gavin Daly

The firm believes 203.4m barrels of oil could be recovered

US Oil & Gas, a once-quoted Dublin-based exploration group, has tapped investors for $595,000 (€560,000) and aims to raise more funds to develop a Nevada oilfield that is estimated to hold 1bn barrels of oil, writes Gavin Daly.

The company, headed by Brian McDonnell, sold almost 1.75m new shares to private investors, just weeks after saying its Hot Creek Valley had a “best case estimate” of 1,017m barrels of original oil in place. The figure is a significant increase on a previous estimate that the field had 107m barrels of oil.

US Oil & Gas estimates it could recover 20% of the oil, the equivalent of 203.4m barrels. Crude oil was priced at $55.70 (€52.38) a barrel late last week, giving the field a potential gross value of more than $11.3bn.

US Oil & Gas was founded in 2009 and has raised about $13m from investors, including private clients of stockbrokers Davy, Goodbody and Investec. The company was listed on the London Plus market from 2009 to 2011 but shifted to the Danish-regulated GXG Markets after its shares were delisted in London.

It has been unlisted since the GXG Markets closed in August 2015, but said it was preparing to seek a listing on an alternative stock exchange. The company attracted attention in 2012 when its Eblana exploration well in the Hot Creek Valley in Nevada made the first discovery of oil in the state in more than 30 years.

In November that year, the company secured a High Court order aimed at identifying who had posted allegedly defamatory remarks about it on internet message boards. The court heard the company lost €132m in value after “totally untrue” postings about the Nevada drilling project.

Shares in US Oil & Gas traded as high as £7 in 2012, but collapsed in value and the company put a hold on development. Recent share placings have taken place at 27p a share.

The revised estimates for the potential of the Nevada oilfield come from seismic research and modelling by international oil services groups Halliburton and Baker Hughes. In a statement, US Oil & Gas said it was “moving forward rapidly with its corporate and operational agendas”.

“Discussions with drilling contractors are taking place, and a detailed drill plan is being prepared,” it added.

“Fundraising efforts continue, with the primary aim of maximising resources for drilling operations.”

US Oil & Gas said the new funds would be used for working capital purposes and it was planning an open offer in the near future to raise more funds. The company has no revenues and made a loss of over $808,000 in the financial year to the end of last July, bringing retained losses to $5.7m.

McDonnell has a 7.8% stake in US Oil & Gas. The company said it was “preparing to seek a listing on a recognised market and is making excellent progress towards satisfying various admission requirements”

Company has opened a book to issue further shares (around 8.088m at 27p) to progress validation of the field.

Currently raising cash via a .27p/share Placing. Anyone who considers this worth a punt may get some shares as part of the Placing if not all shareholders can afford to take theirs up. I shall take up mine plus hope to add a few because I like two aspects about it:
1. The results of the drilling and Baker Hughes opinion on the remaining acreage will be known fairly quickly - maybe early second quarter.
2. The drilling planned for the next few months involves sidetracks where oil has already flowed. What needs to be found is the 'kitchen' which is trapping the oil and with their appraisal work completed I think it will prove possible. Do your own research on the company website to see if you like that idea. It's either a stunning winner or a total flop- no middle ground.

Is anyone else in this stock?

Take-up for the Placing at 27p closes today. Provided enough extra is raised, a re-commencement of drilling should be expected soon. More likely in the short term is that some Placing shares will not have been taken up and an extension for allocating these will be offered before more on site activity is started. Once it does, this stock could just become a real star.........on the other hand? I am prepared to bet on it being a successful future.

A further $1.5m raised in the Placing which looks like it will be sufficient to move the company's plans forward. The longer term position over the unallocated shares needs clarifying; would these be available for purchase by investors not on the share register?

Looks like you're on your own re this one.

Looks that way. Not a problem, it is a gamble. I think the outcome will be known in a matter of a few months - either the drilling proves Baker Hughes right or it doesn't. Drilling sidetrack wells from the existing Eblana 1 should prove to be an efficient and economic way to find out.

US Oil&Gas is still seeking to arrange a Listing on a recognised Exchange. Meanwhile, AssetMatch.com have commenced running an auction book on the company. Early days - offers to sell range from 25p/share to £3.50/share. With further operational progress likely to be announced in a matter of a few months (my guess 3-4 months from now) plus more independent reports on the potential oil in the whole block likely to be announced much sooner, the Asset Match auction system might produce some interesting transactions.

AGM 25/4/2017. Shareholders should expect to get a drilling programme for Eblana 1 sidetracks, Baker Hughes' view on what the potential is for the remainder of the block (some 87 sq. Kms.) and also a target date for a return to a Listed Stock Exchange.

AGM outcome:
-Drilling of two wells now funded and will proceed (subject to relevant permissions).
-Insufficient funds available for an application to re-list on a recognised Market. In view of the potential for wildly different outcomes of the drilling process, that is probably in everyone's interest. Suspect that the timetable for an outcome to the drilling being known in Q3 may be bettered by earlier information.
-No comment appears to have been made on the Baker Hughes' view of the remaining acreage in the exploration licence. Maybe that would be of little real value pending the outcome of the drilling which is proposed for Qtr. 2-3

News of drilling dates should be announced early June with completion of the drills by September (according to the timetable suggested at the AGM)

Latest Assetmatch auction showed a strengthening of the price shares were being sold/bought. Now 30p. The company confirms it is working to the timescales given at its last AGM which was for drilling by September. Interim progress reports do not appear to be the company's policy so a dose of trust and patience is required.
As stated before this stock is a binary investment decision - if it gets drilling and looks like it is confirming the independent views of the potential then the sp should go sky high. It briefly hit £7/share some while back but the oil shows were subsequently inadequate. Since then much more work has been done to refine the drilling process to suit the local geology. The CEO always stated that pin point accuracy was required because of the geology. Sidetrack drilling should give a much higher chance of finding the oil bearing structures.

Latest Assetmatch auction price 35p/share. Closes 15/8. More shares sought than being offered as of today. If the company meets its target drilling timetable then September should see the start.

Next auction closes on 5/9. No buyers at the moment and only one seller. Tomorrow is supposedly the month when the drilling of the two sidetrack wells starts.the company look likely to keep spud dates etc to themselves. Pitiful PR. But with 50% of the stock in the hands of the Board and a few large shareholders that makes for a reasonable insurance policy that whatever the drilling produces there will be some corporate activity. This won't interest many, or most!, but one sniff of a decent drill outcome should have a dynamic effect on the value of the company.

Last auction - one trade at 34p. The lack of interest in this company is understandable given its record to date, but if the drill application (apparently awaiting approval) is approved, it may get very difficult to get any shares in this prospect.

Auction result from 21/9, one trade at 34p. Assetmatch now holding auctions for US Oil&Gas every fortnight.
No official company announcements but one source says that a new drilling pad to the south of Eblana 1 has been prepared and that a further £0.5m has been raised. This is believed to be in readiness for up to 3 drillings to be carried out once approvals are in place. These approvals are expected but no timescale seems possible to predict.
The company may have good reason for being ultra secretive or this may be because of the frenzy and mud-slinging that took place a few years ago. Because of this, the first any of us gets to hear anything at all may not be announced until after drilling and at a time when further independent assessments of the remainder of the acreage are known.
As always, do your own research before making any investment decision; investing in this stock is a binary decision, although at least the directors and close associates hold nearly half of the shares in issue, so ordinary investors can at least hope that there is plenty of incentive for the Board to make a success of this or salvage some value if the current drilling budget proves insufficient to conclusively establish what amounts of oil are in place.

Latest auction : indicate 25p sp. Not surprising given that the company makes no announcements as to where they have reached as far as drilling is concerned. Since the AGM timetable was drilling in September - they are obviously behind on that timetable. The silence from the company is pitiful and wrong.

Current Auction finishes on 30th January. With drilling permits for two wells believed to be in place this might be the last auction period before spudding. This has the potential to be one of the most interesting prospects around. Difficult to buy shares in quantity - there are not many held outside of the Board and their contacts.
Auction site: Assetmatch.com