United Oil & Gas (LSE:UOG) — Investor Presentation

0:01 Good morning, ladies and gentlemen, and welcome to the United Oil and Gas PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the Q and A tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all of the questions submitted today and publish responses where it's appropriate to do so. Before we begin, I would like to submit

0:33 the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I'd now like to hand you over to CEO, Brian Larkin. Good morning, sir. Good morning. Thank you for the introduction. Firstly, our apologies for the slightly late start. We had some IT issues this morning. Format for today's presentation or call will be a brief presentation on the company, followed by questions that please do submit in the box on your screens. We are aware that there are a number of existing shareholders on this morning's call, but we're also aware that there is also a lot of people on the call this morning who haven't heard the story before. So today's presentation will be a high level introduction to the company, followed by a run through of our assets and our finances and our balance sheet before wrapping up and taking questions.

1:30 Just to introduce you to the team, I'm Brian Larkin. I'm the Chief Executive of the company. Peter Dunn is our CFO. Good morning, everybody. Jonathan Leather is our Chief Operating Officer. Good morning, everyone. We have a non executive board chaired by Graham Martin, who joined the company in 2018. Graham spent majority of his career with Tullow Oil, where he was executive director. Alongside Graham is Iman Hill as our independent director, who formerly held up BG's group business in Brazil and Shell's business in North Africa. Our strategy, well, we're very much focused on creating as much value as we can for our shareholders, and we do that by maximizing the value from our existing asset base and looking to grow the business through high margin opportunities.

2:21 The company itself is a strong platform for future growth. We have built an exciting portfolio of assets, which have demonstrated value creation both on our balance sheet and also for our shareholders.

2:39 The industry is facing a lot of challenges at the moment. So to some extent, the sector has come somewhat out of favor. But despite the change in market environment, United is very much focused on maximizing shareholder value and returns. We have a good track record in this. And in particular, I point to the experience of our board and our strong corporate governance structure, 20% of our corporate KPIs directly related to ESG metrics. The assembly of our portfolio has also shown our ability to identify high grade assets, acquire them and create and extract value from those assets. And John will talk a little bit about that shortly, and Peter will reference that value on our balance sheet. We do have very strict investment criteria to ensure that we are maximizing value from our assets.

3:27 We've also got a strong track record in our ability to manage our capital and our equity. We haven't raised equity in almost three years. And during that period, we have increased our production, and we've also developed our other assets within our portfolio.

3:45 On Slide six, I won't leave this slide too long. It's just a brief summary of the history of the company since inception in 2015 up to date. What I would draw your attention to is the left hand side of the slide where we have just highlighted the director employees, our latest parties, shareholding within the company. And also on the right hand side, we've put together a graph, which demonstrates the oil price performance and a correlation to United Oil and Gas' share price performance. And as you see, there's quite a significant

4:15 value gap in terms of our share price performance versus commodity price performance over the last period. As a brief introduction to our portfolio, I certainly don't want to steal John, our Chief Operating Officer's thunder here, but just by brief intro to our portfolio, our core assets are in Egypt, where we have got a production based business. We've drilled 11 wells in the last two years in Egypt and increased production substantially during that period. And more importantly, all of that activity has been funded out of operational cash flow. In The UK, we have a discovery, the Maria discovery, which is located in the Central North Sea. We're currently working on our resources report, which we aim to have by the end of this year before we would then consider our monetization options for that license.

5:08 Alongside those two key licenses for us, we also have a license a high impact exploration license in Jamaica, where we have potentially 2,400,000,000 barrels of recoverable oil. That's a drill ready prospect, and we are in the process of farming that license down to bring in a partner to drill well there. I'll pass over to Peter, our Chief Financial Officer, to give you a flavor of our balance sheet and our financial performance. Thank you very much, Brian, and good morning again to everybody. Thank you for taking the time to join us this morning. The slides I just pulled up here, the charge is taking the financial information is taken from our annual report for the last number of years. And it's really is just to give some financial context to how the company has developed over the last number of years and how really the Egyptian acquisition in 2020 was transformational for the company.

6:06 As you can see, over four point five years the last four point five years, the company has generated cumulative EBITDAX of nearly $21,000,000 I think when you put that in the context of the acquisition cost for the rock upper assets or our Egyptian Abyssin asset of $16,000,000 you can see that the operations from Egypt are not only cash generative, but actually very profitable. And you know, it's very good and quick return for that investment. And I think, know, as John will speak to a lot better than I will, the asset is in a better place now today, even after our two and a half years of production than it was, two and a half years ago. So we've added significant value.

6:51 Not only have we extracted cash and extracted value, but we've added value. So the long term value of the asset is is is, as I said, in a better place. And I think what I wanted to we've also shown that we have continued to invest in the asset. And we spent $13,000,000 of CapEx predominantly in Egypt over the last number of years. And that is to deal with the dual priorities of any companies, which is not only to maximize the short term value of an asset, but to maximize the longer term value and which will obviously, we expect to deliver value to shareholders over the short and medium term. Think what we can see also from these balance sheet numbers, I think it's very important to emphasize is that we have delevered the balance sheet. So when Brian and John and the guys of the acquisition a number of years ago, there was a debt and equity spread of fifty-fifty. And over the time, we have delevered that. So we repaid that facility with BP. And at the end of next year, the we'll be fully that facility will be fully repaid.

7:57 That obviously means that there is significant unutilized debt capacity. And we will look to that over the next number of months and over the next number of next year or so to see how we can refinance that and look at putting longer term finance into an asset that will go on for a number of years and will continue to produce cash flows for us for a number of years. So I think the last four years, we've really seen that improved balance sheet strength, and we do most certainly have a very stable cash flow platform that we can use and leverage to deliver value in not only the short term and the longer term. John, maybe if we move on to the next slide. I've just pulled out some of the key numbers in our H1. And I for for those shareholders that are familiar with this oriented on the the most recent

8:42 calls, we've we've gone through this. But I thought it's just worth highlighting a couple of points. In particular, we are exposed to the oil price. So unlike some assets in other jurisdictions, we actually get oil price. We realize the value of that uplift in commodity prices that we've seen. In the first half of the year, we realized over $105 per barrel, and that's very important. I think it's worth noting that the fiscal terms in Egypt are very good and compare quite favorably to fiscal terms across the world. What is different to to maybe The UK or the or the North Sea is that it's not a tax and royalty regime. It's it's what's called a production sharing contract. Basically, that what that means is that the Egyptian state tax or the Egyptian return, the return to the Egyptian government comes off the top line. So rather than having a tax and royalty number further down your balance sheet or your income statement, you actually it comes off the top line.

9:41 So the the tax return for the Egyptian state is circa 57%, 56%, 57%, and our net is 42.5%. And that's how the Egyptian gets the return, and there's no further tax effect today either in Egypt or in The UK. I think what we've seen is we've increased our cash balances over the last year. Shareholders will be familiar with a modest cash balance at the end of twenty twenty one, and that has increased throughout the year. Notwithstanding, we have received proceeds from disposals, but for the cash, we have generated significant cash in Egypt. We have invested some of that cash, we continue to invest that cash in both operational CapEx, that's maintenance CapEx, development CapEx, but also CapEx in relation to exploration wells that we believe will deliver long term value.

10:35 I think it's worth noting that we are operating in Egypt, which is a low cost operating cost environment. The operating cost per barrel compared to other countries is very low. We're and partly because primarily because we're working in an onshore desert environment, we can our operating costs are circa $8 which compared to other operations is a very lean and efficient cost base. And I think finally, I just want to mention, we are delivering strong operating cash flow, 6,400,000 over $6,000,000 in the first half, and we expect that to continue into the second half. And finally, just the final slide is a bit of an overview, and it's more just to give a certain amount of context.

11:23 We recognize we are a small cap business. We have less than $20,000,000 market cap. However, we believe we have very much a grown up and our capital structure is a is a very grown up and and well defined capital structure, where we have strong cash flows from our from our operating assets, which have delevered and improved our balance sheet. We have achieved excellent results from our portfolio management. And we have, as I mentioned earlier, we have not only do we have a current debt facility with BP, which is very important to us and could be very important to us going forward, but we have that latent debt capacity within the asset. What this means is that we can generate those cash that cash and that operational cash flow. So that allows us to maximize our ongoing production.

12:14 It allows us to engage in significant CapEx for development CapEx and also exploration CapEx. But what it also does is it gives us the Egyptian business, which is the engine of our financial performance, provide us with the cash flow to support our other assets. So it allows us to support our activity in in Maria, which obviously we believe will will deliver significant value in the future and and also supports our endeavors in in Jamaica. On top of, obviously, gives us a certain amount of war chest, if you will, to to go out and look at for inorganic growth, which is an important part of our overall strategy. So hopefully, that gives you a brief snapshot on the financial history of the business and our current strong financial position and our plans going forward. And with that, I'd like to hand over to my colleague, John.

13:06 Thanks, Peter, and hello, everybody. Yes, so I'm going talk about the portfolio and the assets that you might have told in a bit more detail. But before getting into those, I do want to say a few words on ESG or environment, social and governance. It's something the company does take very seriously across our entire business. I think that's still reflecting the fact that 20% of our corporate KPIs are made up of ESG metrics. Now there are many aspects to this topic. Often, the focus is on the environment, particularly emissions, but as well as working to ensure that we have well established best practice governance practices in place. We also do a kind of work to develop the communities in which we are present. We primarily do that through funding capacity building programs.

13:53 For example, that would be the Al Amar program aimed at graduates in Egypt. We also work to limit the group's impact on the environment, and we have completed studies on emissions in Egypt and also on the carbon intensity of any development should we have an exploration success in Jamaica. So something, as I say, we do take very seriously with the company and something I want to say a few words on before getting into more detail on the assets. On the assets themselves and starting off with Egypt, which is our producing assets. In Egypt, United hold a 22% non operated stake in the average selling license, which sits in the Western Desert area, onshore Egypt and approximately just two hours to the West Of Cairo. The license is operated by Kuwait Energy Egypt and it's been in production since 2012, meaning actually at this stage, there is a long history of producing from the asset in a very experienced country in team experienced team in country.

14:53 The license itself contains eight producing fields with 21 wells spread across those fields. And what that means is that it provides a robust production base, meaning we're not over reliant on any single field and doing any single well. And the license is delivering around about 1,500 boed per day net to United. Now although the license has been on stream and on production for coming on to ten years, there does remain significant upside potential on the license, And that's both through development

15:23 of the existing fields. You may have seen an announcement yesterday about the Ash 4 development well and a positive test result from that well into one of the existing fields there, but also through exploration. And when you look at the map on the slide here, the white area surrounding the field, that is an exploration area of the license where we have identified a portfolio of exploration targets. And when you think that see that the historic exploration success rate on this license has been close to 80%, which is our exploration. These are near field, low risk exploration targets. When you then look at the fact that it's a low cost asset, we're looking here at very it is onshore. The wells are shallow. They typically very short drilling time. So the net cost to us tends to be less than $1,000,000 net.

16:14 We also cover once these wells come on stream, the operating cost typically run about $8 per barrel. That means that the targets that we have, they were the bonus targets or exploration targets are economically attractive and perhaps not surprisingly, we are actively getting after those targets. When we look at what's still to come from the license, you can see that through a combination of development drilling, which is primarily aiming to maintain materially enhanced production and exploration drilling, where we're looking to grow reserves and secure acreage, there's a potential to add significant value over the years to come on the license. I mentioned already that we announced yesterday morning a positive test result from the Ash 4 development well, which tested a maximum flow rate of over 2,000 barrels of oil per day on test. And the rig that drilled that well is now going to need to drill a high impact ASW-1X

17:05 exploration well, which is targeting on a gross basis 8,000,000 barrels. And we said high impact, but then in some context, Net to us, that's nearly 2,000,000 barrels. And our reserves at the end of last year were 3,000,000 barrels. So should we have a success that comes in here, that does materially enhance the value that's on the license there. It's also worth pointing out that the exploration targets we're talking about here have benefited from recently processing the data, which has really improved the quality of the subsurface imaging. And much as ASW-1X is one of the largest remaining prospects in the license, it isn't a standard on prospect finding. Have a large portfolio of prospects across that exploration area that I showed on the previous slide, over 30 identified prospects, all of which benefit from the low cost nature of the asset, meaning even small volumes here at discovers can be commercially attractive. And even when look at the bubble plot on the chart here, it shows those exploration targets.

18:00 You can see the minimum commercial fields are lying there and the fact that the vast majority of these targets lie well to the right of that line.

18:08 And again, when you cut the fact that these are low risk targets and the historic exploration success rate around 80%, and these are attractive targets. And as you can see at the base bottom here, the drilling program just completed the ASH 4 development well, moving on to the S3-1X well. We are expecting a very active drilling program to continue into next year. We're expecting a good balance of development and exploration wells. And given exploration success, particularly with the materiality of prospects like ASW-1X, we do see the potential to significantly increase production levels from current levels, and that's shown in the bar chart there as we move into the years ahead. So that's Egypt, and then moving on from Egypt to The U. K.

18:58 Central North Sea, where UNITED hold 100% of the Maria discovery. Maria discovery contains around over 6,000,000 barrels of high value resource. The reason we call it certain as being

19:09 high value is that they lie very close to existing infrastructure. You see how close Maria is on the map there to existing piper fields and also to other activity. There is development activity ongoing at the moment around the Marigold development hub just north of Maria.

19:27 The committed technical work program, which was technical studies, including rock physics and cycle conversion, have now been completed on the license. And that has had positive results, not just from REA, but also from the additional prospectivity that lies on the licensed area. We're now in the process of finalizing an independent contingent resources report, and we very much expect that to support the volumetrics that we have calculated and estimated for Maria. And we'll get that completed then ahead of full plan basically assessing and making sure we optimize the forward commercialization options for this asset. And that brings us on to Jamaica, which is our Frontier Exploration License, Wolframorant Basin offshore Jamaica.

20:15 It's a very large license of 22,000 square kilometers because most of the offshore area to the South Of Jamaica. There's not just a fact that it's large. For opportunity like this, from all the signs we'd want to see to indicate there's a working control system are in place here. We see active hydrocarbon seats, very good reservoir and seal candidates, and we see a number of large structures. So I would now say as well, we have been working on over a number of years to show that results delivered an excellent data set.

20:49 So we first want to refer to this as a world class exploration opportunity. It compares with anything globally in terms of this type of frontier opportunity, the positive indications that are there and the data set that exists. And indeed, we now have another stage where we've mapped up on that data. The Khalevi prospects, it's at a drill ready stage, has been independently estimated to contain over 400,000,000 barrels of recoverable resources.

21:14 The next stage, United currently hold its license at 100%. The next stage really and ultimately for Australia is to bring in the partner to accompany us in drilling that prospect. Although the stand alone delivery is very attractive, 400,000,000 barrels and NPV of close to $4,000,000,000 that is only the start of the potential within that license. There's a further 10 prospects that have been identified and included in that independent report, which between them contain over 2,000,000,000 barrels. So should we have a success on delivery, that initial well potentially opens up far more than that 400,000,000 barrels, giving us potential to access a multibillion potential there. License also benefits from a very supportive and positively engaged government. We were awarded an extension to the license that started this year for two years.

22:01 And when we've been in country, we've had the opportunity to meet with both the minister and the prime minister of Jamaica and talk them through our activities and the progress that we've been making on the license.

22:12 We're continuing as well with the technical work program, which continues to provide additional positive evidence for the offshore prospectivity. And in parallel to that, we are working actively to facilitate the valuation of the asset from potential pharma partners. When we look at the fact that we're looking at an increasingly positive market environment, where there's increased focus on energy security and higher commodity prices. And given the figures and the positivity that we've seen from all the indications on Jamaica, it's not surprising that we are seeing significant interest in the opportunity. And then just to finish up with a summary of what's still coming from the value catalysts that are coming over the next twelve months or so.

22:57 On the top line in Egypt, we've just completed the Ashore development well, moving on to the two very exciting high impact ASW-1X exploration well and then expecting a very active program next year, which will include the balance of both exploration and development drilling. In The UK, we surely expect to be completing the continued resources of Porta Maria and then look to evaluate all the commercialization options. And in Jamaica, studies and pharma efforts continue, and we look forward to providing a further update once we are in a position to do so. And then in addition to those activities, is worth pointing out as well that the team does continue to evaluate new venture opportunities. And we have got a great asset base, but we are also looking to do what we can to add to that and have further value from additional opportunities that might be out there.

23:49 But in summary, trade off the base and lots of value adding activity still to come.

23:55 With that, I'll hand back to Brian. Thanks, Chaps. Just in terms of summary and and and wrap up, we've covered quite a lot in a short period of time. So very happy to take any questions shortly. But just to wrap up, we feel that we've got all the ingredients in place to continue the growth of the company. We've got proof of execution that we can execute transactions. We can execute work programs. We've got proof be it on execution that we can create value from our assets and grow our asset base. We have a very strong team in place, which we've I think the output of our work over the last number of years demonstrate the strength and capability of the team. And the next steps for the company is scaling up. There's two ways to scale up, inorganic and organic. When we talk about organic growth, we talk about scaling up existing asset base, creating value from existing assets whereby we execute our work programs in Egypt and look to increase our production there. Also, moving forward our Maria discovery into a

24:58 with a reserves resource report so that we can look at our monetization stroke commercialization options and also driving Jamaica forward. We also have an organic opportunity via acquisition and scaling up the company by adding more assets into the portfolio at the right time, but also more importantly, the right assets.

25:20 I think at this stage, I'm very happy. We're very happy to take any questions. I think a number have been submitted already. So please do, if anybody has any further questions, please do submit them. Thanks, Brian. Peter, Jonathan, if I may just jump in there. Absolutely. And thank you very much indeed for your presentation this morning. Ladies and gentlemen, please do continue to submit your questions just by using the Q and A tab that's situated on the top right hand corner of your screen. But just while the team take a few moments to review those questions that were submitted already, I would like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. Brian, Peter, Jonathan, as you can see, we have received a number of questions throughout today's presentation. And thank you to all of those on the call for taking the time to submit their questions. Sharon, perhaps I could hand back to you to share the q and a session with the team. And then if I pick up from you at the end, that would be great.

26:15 Great. Thanks, Jake. So we have had a number of questions, and I'll read them out and get them answered for you. The first question is, can you talk to the drilling performance for 2022 and characterize that for your expectations and what's being delivered?

26:35 Yes, sure. Thanks, Sharon. Yes, so it's been an active program in 2022. We so far completed four wells, about the fifth well. When we look back at what, you know, what the results of the the drilling program were earlier in the year, which was the ASD two development well, that came on stream well ahead of expectations in terms of production rate has continued to produce above expectations throughout the year. That well been very successful. We just completed, as we announced yesterday, the the well task results in the ash bore well. Think, you know, when we look at results there, I think we're looking again at success that was was in line with our pre drilled expectations there. We also have the the 14 development well, and that was the well that I think, we look at it realistically, we would have liked to have seen come on stream earlier.

27:25 We did find net pay in the reservoir there. We had some discussions around the best best way to bring that on stream and what we should be targeting and optimizing within JP. But we are now expecting that to be stimulated over the coming weeks. And when that is brought online, we do expect it to come online at rates in line with what our expectations were for it. But, yeah, I I did. I think we would like that to have been on stream a little bit earlier. And then we also have the the ASD one x exploration well. Now although that well was not successful in terms of bringing it on stream running to production, it did give us a lot of additional information in a key area of the license. That information will feed into the site and the process that we're doing and will add to potentially further exploration targets in that area.

28:13 It did demonstrate that hydrocarbons have migrated into what was an underexplored area of the license. First of all, well to date, and we're now, say, shortly due to suppose the fifth well, the AFW-1x well. I think as I probably said in the slide, but it's very exciting, high impact exploration, like one we've been aware of and looking to drill for quite a while. But with 8,000,000 barrels of potential growth, clearly is high impact well. We look forward to drilling that and updating the markets once we have results from that. Thanks, John. Next question. What can you talk to what quantity of ore production is hedged and the price per barrel?

29:00 Thank you very much, John. Well, the board and or myself and the board, we review our our hedging policy on a regular basis. We we currently do not have any direct oil hedges in place. We do have a hedge in relation to the derivative or the the financial instrument we have from from BP, which give us an an indirect benefits of of a hedge, which, should the oil price go below $70, the repayments under the facility will will drop. So that gives us some level of protection. We do regularly look at the cost benefit analysis on hedging. But given our current level of production and the value that is in synthetic hedges because we don't actually get the barrels.

29:50 Our barrels are sent are sold directly to EGPC. The cost benefit isn't there for us right now, but it's something we could we we consider. We stay in touch with the market to ensure that we're aware of new products, that synthetic hedges that are available, and we'll continue to review that policy. But but I said, as of today, there is no direct hedging, on our barrels, but we do have an indirect hedge from the BP facility. Thank you, Peter. Next question. Can you talk to the number of well sorry, the number of well plans for 2023, current decline in production for existing wells, and how close are you to selling the North Sea asset?

30:37 Yes. Sure. So on the 2023 program, I mean, that is something that, as I say, is still being finalized, but we are expecting to continue a very active drilling program, at least three, possibly up to six wells. We are looking at options to potentially bring in another rig as well. So the number of things that we're looking at, I think the key part there is we want to get good balance of development wells. I'm looking to enhance the the production from the assets as well as exploration, which is not just about enhancing the production short term, also delivering long term value and adding to the reserves based off the license. There's a number of the parts there of the question, Sharon. Yeah. And it was talking about the decline rate for the existing well. Oh, yes. Decline rate for existing wells.

31:29 We don't we don't talk about the decline rates on individual wells. If you do look and we do publish the reserves report, we have that from the end of twenty twenty one, it says on our website. That looks at decline rates from the asset as a whole. With with limited activity, you know, you're typically looking at rates across 15 to 25% decline rates. Thank you. And I think there's a question about Korea as well. Yes. And then and then North Sea and selling those assets. Could you talk to that, please? Yeah. I think I think that piece, John. We we haven't made a decision on the way forward for Maria just yet. Now is not the time. We will wait until we have as much information as we can possibly get together and collate before we make a decision on monetization options. The real key piece of information that we want completed is the resource support, which we should have by the end of the year.

32:18 Once we have that in our hands, we can then look at commercialization options. And and and there is a number of options for commercialization. There is a straightforward divestments, and there's also a partial divestment where we stay in the office and, participate in a development. And, at this stage, it's a little bit early to say which way we would go. I think the outcome of the resources report will will help, inform our decision. But, certainly, it would be attractive to us to consider staying in the license based on what we know right now today. Our opinion on that will change. But, certainly, at this stage, it would be it would be attractive for us to stay in a development of Maria. Thank you, Brian. There's a number of questions on the Jamaica farm out. What is the progress there? And is there anything else you can tell us?

33:07 Maybe I'll take that one, and, I can ask John to chip in a bit. We're very limited on what we can say on that process, unfortunately. We do have significant interest in the project. We are on the confidentiality agreements with a number of parties, and, we believe in the project. We do believe that we will bring in a partner, but it's not gonna it's not gonna be quick. We've always said that it's gonna be a long road. These projects, by their nature, are quite quite long lead times. And in addition to that, you know, it is a new country entry for any counterpart or any potential partner, and it does take time to get counterparties comfortable with new country entries into Jamaica. So we believe all the ingredients are there for a really strong project, but we just have to be patient, and we believe that the patience will pay off over the longer term.

34:01 Yeah. Absolutely. I mean, I think one thing to add to that is just, you know, with particularly this year, you know, we have seen increasing positive market environment in that, you know, with I said it on the slides that the folks in IT security realization that actually meet future needs, there is going to be a need for investment in this type of new country exploration opportunity. And we are seeing that combined with the high commodity prices feeding into strategies of particularly larger companies And that has led to significantly increased interest in Jamaica. We are engaging a number of people on that at the moment. You. Next question. Could you talk to what percentage of revenue in Egypt is paid in Egyptian pound?

34:48 And the second part is how much is the company currently able to transfer out of Egypt in U. S. Dollars? Thanks, Sharon. Well, maybe just backing up on that a little bit. All our revenue is denominated in U. S. Dollars. So we we invoice in in US dollars. EGPC under the contracts are are to pay us in US dollars. However, the practice for all oil companies, in Egypt over the last number of years, well, basically, since I've been working there in 2012 is to accept the combination of both US dollars and Egyptian pounds. US, that that works for for for the company. It particularly works for a company like ourselves that continue to invest in countries to deliver value. The majority of our costs are in in Egyptian pounds.

35:33 I'm afraid I can't go into a detailed breakdown of a split because of US dollars and and Egyptian pounds because it's commercially sensitive. Every every oil company in in Egypt is seeking to maximize the amount of US dollars that they they they receive. And I certainly don't want to cause an issue with EGPC by which is a national oil company of Egypt by by stating the the percentages that that United Oil and Gas are achieving. We do receive U. S. Dollars, and we do we have been able to and continue to be able to transfer U. S. Dollars and Egyptian pounds from Egypt. It's, you know, as we noted in our interim statements, there has been some macroeconomic issues that have, impacted Egypt, which we believe are in relatively short short term, which have brought about some challenges around US dollar liquidity, but we have managed through that process. I think it's very important, for Egypt as a country that on the October 27, the IMF agreed, a loan of its $4,000,000,000 loan into into Egypt, which is being further supported by other funds from from both states of of between 6 and 9,000,000,000.

36:46 So whilst this year has been somewhat challenging from a macroeconomic point of view following the the the war in Ukraine, we are seeing some improvement in in US dollar dollar liquidity. But it hasn't in any way affected our our operations locally and hasn't affected our operations back in UK or not. Thanks, Peter. What factors do you take into account when deciding if an exploration well is worth drilling? Yeah. Good question. So we I mean, as well as, you know, the operator of the license, we're looking at say, Egypt and doing well exploration in Egypt there. The operator do their own work. We do our own technical work. What we're looking to assess is the potential signs of the accumulation and the potential risks associated with that. And then we feed that into commercial assessment to make sure that should we have success there, you know, a risk basis that actually these are going to be value adding targets that we're going after.

37:46 I think when we look at you know, some of the wells have been drilled, the exploration wells we drilled previously, they were they were very low risk wells. It's another four way dip closes very close to an existing field. Very high chance of success, but then the volumes associated with them, you know, are commercial. We got to add value, but not necessarily needle moving in terms of new reserves. When we then look at something like ASW one x, that is something that is slightly higher risk than say that the historic rates in the license of around 80%, I think we would carry around about 50% expiration chance of success there. But, you know, as I as I talked on the slide, the the volumes associated with that structure are very large. So it's something that, you know, that we've mapped separately and that we've had discussions on something that we are very keen, have been keen to see drilled.

38:40 We recently acquired or reprocessed data across that structure, which was supportive of the volumes that were there, done the presence of that picture. So again, that is now, we've just stayed where the next one is going into that, and we're we're really looking forward to to to seeing results of that well. Thanks, John. And just picking up on that, could you talk about the location of the ASW where and your understanding of the structures underneath? So, I I mean, ASW, you know, clearly, in terms of size, ranks, you know, very, very highly across the rest of the portfolio, is why it has been prioritized with the volumes that are there. Interestingly, it does target a number of different reservoir reservoir levels.

39:27 It's situated to the Southwest about 10 kilometers, 12 kilometers Southwest of the Ashfield. And there are AV targets which we know to be a very prolific reservoir, but there are also numerous out of Roche and Bahari targets as well, which we will be penetrating as well. So again, I look forward to to seeing what we find in those multiple wrestlers. Thanks, John. Next question. Could you talk to the share price and the value gap in that in that share price? Sure. I'll take that one. The share price performance has naturally been extremely frustrating, not just for our existing shareholders, but also for my team. A lot of hard work goes in to build the portfolio and to match in the value from the assets and to not see it in the share price is usually frustrating.

40:18 I think what's extremely important for us is that we continue to make the right decisions for the business. That's crucial. We can't make decisions to get above the share price. We have to make decisions that are the right decisions for the asset over the longer term. We always remain confident that the frame will rise to the top, and we'll see that value reflected in the share price. We have taken quite a lot of action this year in terms of media engagements and shareholder engagements, particularly investor relations engagements, including quite a number of new investor roadshows, investor calls. Example of the call we're on today, we've held many investor meetings and potential new investor meetings throughout the course of this year. We've also changed our broking team to bring in potential new investments into stocks.

41:06 But it is difficult. It's hard work. And but, you know, there is a value gap that is correct. And the value gap and we are aware that there's quite a lot of people on the call today who haven't heard the story before, but the value gap is essentially a buying opportunity too. So we will continue to run the business the right way and to make the right decisions by the assets and have faith that the share price will catch up with us and will reflect that value. Thank you, Brian. Could you talk to the production in q three and and the new ash four well and the production on that? Yeah. I can I can take that one? Look. In terms of production in q three, we gave an update on the production levels at the end of September.

41:54 Much as we do have an initial test result from the ash bore well, we would do want to wait for that to come on stream and see the rate which is producing stabilized. And once we have stabilized rates in that well, I think that would be the appropriate time at which to update the production levels. Thank you, John. Next question. Do you consider that having a production base in a single country is the best way forward for a junior E and P? Or would a second production stream improve the portfolio's attractiveness and risk aversion? It's a really good question. It's a really good question. I guess, to answer kind of two parts. Firstly, we have to start somewhere. So we have to get a production asset somewhere. And, Egypt made sense. And I think the deal we've done in Egypt, we've been validated in that acquisition in that we have increased production.

42:49 We have, funded our entire company on the back of Egypt. We've created cash. So I think Egypt has been a really good acquisition for us. The next phase of our development is obviously continuing to grow our production in Egypt, also to look for opportunities to bring other assets into the portfolio. Now it makes sense for us to look in Egypt to add more assets to portfolio because we know it should be the team that are in place and country. But, certainly, we are opportunistic. And for the right deal, be it outside of Egypt, we're certainly considering Peter's already mentioned that we have some optionality around our our financial structures and that we've we've got an asset that, you know, the value of that asset has increased substantially since we acquired it, which means that its borrowing capability has increased substantially since we acquired that asset.

43:40 We also strengthened balance sheet. So Peter has already alluded to a war chest building, and and certainly, we feel that while leveraging this business coupled with our balance sheet, that we are in a position to move should we identify a acquisition. There is very few deals that get mentioned or announced that we haven't seen. And one thing I'm very pleased about is that we're not missing any deals that come to market. In the last eighteen months I decided last twelve months, we have signed 30 NDAs. We've been in 18 processes, but we have declined to move forward on a number of all those transactions because they haven't met our high and strict investment criteria. But, certainly, it is does make sense to diversify risk across our portfolio, and we will look to do that. But the most important thing for us in any acquisition is that it's the right deal, structured, and financed the right way. And that means being patient.

44:35 And I'm not the most patient man in the world. Well, I have to be patient to make sure that we we we only go after the right deals, for our shareholders. Thanks, Brian. Those were all the questions that were submitted. Should we just give a moment in case there's any any further questions? Sharon, if I if I may just jump in there. And Brian, Peter, Jonathan as well, thank you very much indeed for addressing all of those questions that came in from investors this morning. And, of course, if any further questions do come through, we'll make these available to you immediately after the presentation has ended for you to review and then add any additional responses, of course, where it's appropriate to do so. Brian, perhaps before redirecting those on the call to provide you their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments to wrap up with, that'd be great.

45:29 Yeah. I I really just to thank everybody for taking the time today to join the call. If anybody does have any follow-up questions, please do submit them to the company. As I've mentioned, we're aware there's a number of, people on the call who haven't heard the story before. So if they want anything else more clarified, please do make contact with us. We always endeavor to respond to any queries or questions that are submitted as quickly as we possibly have. But otherwise, just thank you to our existing shareholders for their continued support. It is appreciated, and it's not taken for granted. And thank you all for your time this morning. That's great. Brian, Peter, Jonathan, thank you very much indeed for updating investors this morning. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations.

46:19 This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of UNITED OIL and GAS PLC, we would like to thank you for attending today's presentation. That now concludes today's session, so good morning to you all.