4 months ago
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United Oil & Gas Plc, UOG, says it has secured a two-year extension to its Walton-Morant licence to explore for oil offshore Jamaica.
The two-year extension gives United Oil, a company based in the United Kingdom, more time to finalise discussions with drilling partners. If the company does not commence drilling within that period, it risks losing the Walton-Morant licence unless granted another extension.
“The extension provides UOG with the security required to advance discussions with farm-in partners and progress technical work, reinforcing the significant exploration potential of this licence,” United Oil CEO Brian Larkin said in a release on Thursday.
Ultimately, the hunt for oil offshore Jamaica requires a partnership with a drilling firm willing to invest about US$30 million to test for oil. United Oil said the talks are confidential.
“With multiple parties now under NDA and re-engagement with previously interested parties, we are well-positioned to secure the right strategic partner to help unlock this asset’s potential. Our current work programme is designed to further de-risk the licence, and with returning sentiment to high-impact frontier exploration opportunities, the Walton-Morant licence stands out as an exceptional investment case,” said Larkin.
Initially set to expire in January 2026, the licence is now valid until January 2028, granting United Oil leeway to advance exploratory activities and continue the search for farm-in partners. The extension reflects the Jamaican government’s continued support of oil and gas exploration in the region, the company stated.
The Walton-Morant Basin spans 22,400 square kilometres south of Jamaica and is recognised as a high-impact frontier exploration zone. United Oil holds a 100 per cent working interest in the project and has identified promising prospects through extensive seismic data analysis.
United Oil took control of the exploration project in 2020 when it acquired Tullow Oil’s interest in the Walton-Morant licence. Since taking control, United has faced challenges, including sourcing cash for high-impact exploration in the frontier basin, but the company has maintained that Jamaica represents a “multibillion-barrel opportunity” and says it is committed to unlocking the potential of its oil reserves.
United plans to conduct more tests in the basin this year, while continuing geological and geophysical surveys. Progress on these initiatives is expected to bolster investor confidence and attract a drilling partner.
Despite its commitment to the project, United is grappling with financial constraints. The company recently raised approximately £1 million to fund operations for the year.
Last year, United offloaded its Egyptian oil-producing asset which resulted in a write-down of roughly £23 million.
The UK company’s operations earned no income over the January-June 2024 half-year, while nearly tripling losses to £1.6 million, compared to a £600,000 loss a year earlier. United held £6.4 million in net assets at June 2024, most of which relates to intangible assets that include exploration activities in Jamaica and elsewhere.
United’s entry into the Jamaican market was initially driven by the region’s strong potential for oil discoveries, particularly recent discoveries in Guyana. However, the initiative has faced setbacks, from missed targets to global disruptions such as the pandemic and the Russia-Ukraine conflict, which destabilised loan markets.
United is the third company to lead the search for oil in Jamaica in 15 years. Sagres Energy of Canada entered the market in 2010 and exited in 2012 after failing to secure a drilling partner; Tullow from the UK entered the market in 2014 and exited in 2020.
English (US) ·