Exploration company corrects claims of oil find
Published:Wednesday | August 28, 2024 | 12:06 AM
Oil explorer United Oil & Gas Plc on Monday rejected social media claims that it has found oil in commercial quantities in Jamaica.
The UK-based company is still trying to find a drilling partner to test whether data collected offshore Jamaica, so far, results in an oil find. It continues to evaluate four potential partners from which it hopes to make a selection.
United Oil indicated that to date it has drilled “no wells” in the Walton Morant licence zone and “therefore no commercial oil or gas discovery has been made,” it said in a statement to its shareholders on Monday.
“We will update the market at the next suitable opportunity,” said CEO Brian Larkin.
In recent weeks bloggers have misinterpreted presentations in June by United Oil which showed over seven billion barrels of substances resembling oil within its exploration zone. United Oil utilised 2D and 3D geological maps to determine that the substances were within the earth’s core.
Drilling of the area is required to verify that these substances are oil. And United Oil needs to those test drills within one-and-a half-years or forgo its licence from the Jamaican government. United Oil is seeking a partner to share the US$30-million cost of the test drills.
“We continue working to secure a strategic partner to unlock the immense potential within the licence, including recent positive interest that has been shown by several parties,” the company said.
The hunt for a partner has been ongoing for some time. The company announced last year that it found one but a week later the entity pulled out. The exit happened just prior to the end of United Oil’s January 2024 deadline to drill or drop its licence. But United Oil subsequently got an extension from the Jamaican government, which has given it up to January 2026 to make progress on the test drill.
That extension allowed the company to pitch to new prospects.
“Currently the company has four interested partners under non-disclosure agreements,” United Oil said in its annual report released in June.
United Oil’s exploration rights cover 22,400 square kilometres, an area that runs all along the southern black sand coast of Jamaica, called the Walton-Morant block. Its most promising prospect is the Colibri area, which runs south of Westmoreland.
The Jamaican exploration asset were valued at US$5.7 million on its balance sheet at year ending December 2023.
United Oil’s book value is only about US$6.5 million. The company made no revenue in the year as it shut down operations in Egypt, and is restructuring operations in the United Kingdom. Consequently, United Oil inked over US$20.4 million in losses in 2023, compared to over US$2 million of profit the prior year.