United Oil & Gas PLC has been awarded a two-year extension for its Walton Morant oil exploration licence in Jamaica.

This is the second extension granted by the Jamaican Government to United Oil & Gas after extending the Walton Morant licence earlier this year until January 31, 2022. The UK-based company’s exploration licence will now run to January 31, 2024, and by then will be required to make an initial ‘drill or drop’ decision.

United Oil & Gas will use the extension to continue its search for a partner for its Walton Morant licence. An amendment to the production-sharing agreement will be submitted to the Ministry of Science, Energy and Technology for final signature next month.

The company holds and operates a 100 per cent equity interest in the licence after acquiring Tullow Oil’s majority 80 per cent equity in the project. It is actively working to achieve the best path forward for this exciting high-impact asset.

United Oil & Gas says it sees strong evidence of a hydrocarbon system in Jamaica, including source, reservoir and seal rocks having commenced prospecting in April this year. It estimates the Colibri prospect’s resources to be approximately 406 million barrels of oil (MMbbl).

With news of the extension, the company’s shares on Wednesday morning went up 3.0 per cent to £2.60. United Oil & Gas holds the licence for two large zones, collectively called the Walton Morant, which contains over 2.4 billion barrels of substances that resemble oil, referred to as ‘prospective resources’.

The quantities of resources were revised upwards based on an independent assessment conducted last year by British consultancy firm Gaffney, Cline & Associates. The Colibri prospect, according to Gaffney, Cline & Associates, holds roughly 15 per cent of the Walton Morant’s prospective resources.

Commenting on the extension, United Oil & Gas Chief Executive Officer Brian Larkin remarked, “We are delighted to have received approval for the two-year licence extension in Jamaica. 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.”

He explained that, “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. 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.”

United Oil & Gas was established in 2015 and currently has oil and gas exploration, development and production in Egypt, UK, Italy, and Jamaica. Its management strategy is to expand the current portfolio with value accretive acquisitions focused primarily on stable international jurisdictions.