United seeking partner to unlock Jamaican oil potential after scoring licence extension
After being awarded an extension on the Walton Morant offshore licence by the Jamaican government, United Oil & Gas (UOG) will be moving forward with its farm-out campaign for the drilling of the Colibri prospect as it searches for a partner to unlock the region’s potential.
The company confirmed on Wednesday that the request for a two-year extension for the Walton Morant licence was granted by the Jamaican Cabinet.
Brian Larkin, Chief Executive Officer at UOG, commented on the licence extension: “United has done extensive technical work on this asset, which has over 2.4 billion barrels of unrisked oil potential and the basin-opening Colibri prospect at a drill-ready stage.”
To remind, United Oil & Gas farmed into the Tullow Oil-operated Walton Morant licence at a 20 per cent equity level in November 2017, while the first-ever 3D survey completed in Jamaica, which included the acquisition of 2,250 square kilometres of seismic data, was successfully completed in May 2018. This was focused on the high-graded Colibri prospect.
In August 2020, the government of Jamaica assigned Tullow Jamaica’s 80 per cent stake in the Walton Morant licence to UOG for a nominal fee. Therefore, the firm holds and operates a 100 per cent equity interest in the licence since last year. The amended licence covers an area of approximately 22,400 square kilometres.
The initial exploration period over the block was extended by 18 months at that point and United was given until 31 January 2022 to make up its mind before the drill-or-drop decision was required. After getting this extension, the company completed an agreed work programme aimed at further de-risking the prospectivity on the block.
Following the completion of the approval process for the latest extension, the licence will now run until 31 January 2024. The company stated that an amendment to the Production Sharing Agreement (PSA) would be submitted to the Ministry of Science, Energy and Technology (MSET) for final signature in mid-December 2021.
United claims there is strong evidence of a hydrocarbon system in Jamaica, including source, reservoir, and seal rocks. The company reports that an independent evaluation of 11 high-graded leads and prospects by Gaffney Cline & Associates, which was announced in December 2020, indicated the potential for a combined estimated 2.4 billion barrels mean prospective resources.
A formal farm-out process for the Walton Morant licence was started earlier this year. United is seeking a strategic drilling partner with a view to drilling the primary 3D seismic defined Colibri prospect. This is estimated to hold mean prospective resources of 406 million barrels.
“The extension allows us to continue the farm-out campaign with confidence as we look for a strategic partner(s) to unlock the vast potential in this region. The support and encouragement of the Government of Jamaica has been excellent and reflects our strong relationship and the positive outlook for the industry in Jamaica,” added Larkin.
The amended Walton Morant licence has numerous leads and prospects already identified across three separate basins with eleven wells drilled to date – nine onshore and two offshore – and all except one contained hydrocarbons.
“With the licence extension, the outlook for higher commodity prices, sentiment for exploration and anticipated recovery of the investment cycle we look forward to pursuing this significant opportunity in the region for the benefit of all stakeholders,” concluded Larkin.