London-listed United Oil & Gas (AIM:UOG) advised investors on drawing “any further conclusions” over the potential at the ASH-2 well in Egypt after media reports caused shares to jump.
In an afternoon statement, the company urged shareholders to tread carefully following initial positive results that were subject to further testing.
Brian Larkin Chief Executive of United Oil and Gas acknowledged “very encouraging” positive results so far from the well, with an achieved 50m of net oil pay recorded and flow rates of 7,000 bopd.
“However,” he emphasised, “with testing still in progress, it would be premature to draw any further conclusions on the oil volumes associated with the well, or the sustainable production rates that may be possible from it.”
Shares in Union Oil & Gas were trading 22.40% higher on 3.825p on Friday afternoon.
“It is worth emphasising that these could be significantly lower than the initial test, and we will keep the market updated as more information becomes available from the ongoing well-testing,” Larkin added.
United’s acquisition will include a 22% non-operating interest in the Abu Sennan concession onshore Egypt.
The company already has a work programme in place for 2020, which will deliver a further four wells, and the completion of the transaction is anticipated for early January following satisfaction of final conditions precedent.
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