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United Oil & Gas PLC said on Thursday morning that the production of its ASH-4 well in Egypt was below preliminary tests of its average flow rate.
Shares in United Oil & Gas were down 21% to 1.56 pence in London on Thursday midday.
The oil and gas company with exploration and appraisal assets in the Abu Sennan licence, onshore Egypt, said current flow rates of 1,027 barrels of oil equivalent per day net were significantly below initial flow rates, which were in excess of its preliminary test results of 1,325 barrels of oil per day.
The preliminary tests also indicated an average flow of 1.8 million standard cubic feet per day.
It said the flow rate decline suggested the well is connected to a smaller volume of oil than expected before drilling.
United Oil & Gas lowered its full year guidance for the Abu Sennan licence to 1,300 to 1,325 boepd net from 1,450 to 1,500 boepd net. It also reduced to its choke size to 24/64 inches from 32/64 inches to manage the well’s reservoir and production rates, which will likely stabilise within a few days.
‘Although the initial production from the ASH-4 development well has not performed as we had expected, it is contributing over 150 barrels to net production today and the data gathered has helped the joint venture partners increase our understanding of the subsurface and the ASH field, which is invaluable in planning future work programmes,’ said Chief Executive Officer Brian Larkin.
Larked added United Oil & Gas are working with their joint venture partners to finalise plans for an active drilling programme in 2023, including at least one development well on ASH.
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