Another delay hinders sale of North Sea discovery

United Oil & Gas (UOG) is engaged in talks with the UK-headquartered Quattro Energy regarding a potential further extension for the sale of its license in the UK Central North Sea, which entails an existing hydrocarbon discovery.

United entered into a binding asset purchase agreement (APA) on 17 January 2023 to sell Licence P2519 containing the Maria discovery in Block 15/18 in the Outer Moray Firth Basin to Quattro for up to £5.7 million (around $6.95 million). The long stop date for the satisfaction of the APA conditions was 16 April 2023.

However, the companies agreed in April on a one-month extension to 17 May 2023 of the long stop date in the APA to provide Quattro Energy sufficient time to comply with conditions precedent related to the funding requirement under the agreement. When May rolled in, a further extension of the long stop date to 31 July was arranged to provide sufficient time for Quattro to meet the funding requirement.

In an update on Tuesday, 1 August 2023, United Oil & Gas confirmed that all conditions under the APA had not been met by the expiry of the long stop date on 31 July. As a result, the firm is currently in advanced discussions with Quattro regarding a possible further extension and expects to be in a position to provide more on this shortly.

United was awarded the license P2519 in December 2020. The Maria discovery, which is located within this license, includes Blocks 15/18e and 15/19c, covering an area of approximately 225 km2, close to existing infrastructure in a “highly prospective area” of the Central North Sea, as previously explained by the company. The license has an independently audited mid-case 2C gross contingent resource estimate of 6.3 mmbbls and 23.3Bcf (10.2 mmboe).

The area encompasses the Marigold and Yeoman discoveries, where significant development activity is taking place and the substantial Piper, MacCulloch and Claymore oil fields. The Maria discovery within the Upper Palaeocene Forties Sandstone was discovered by Shell/Esso in 1976 while drilling for deeper, Piper-equivalent targets, but at the time was not considered commercially viable.