Oil and gas company United Oil & Gas (UOG) has won a two-year extension from the government of Jamaica for the Walton Morant Licence offshore Jamaica. The license will now run to January 31, 2024.
United Oil & Gas was last year has been assigned Tullow's 80% interest in the Walton Morant Licence increasing its stake in the block to 100%.
Tullow in 2018 conducted a 2,200 sq km 3D survey over the offshore block, however, it then elected not to proceed into the next stage of the license.
At the time of UOG taking over last year, the initial exploration period over the block was extended by 18 months, meaning UOG then had until January 31, 2022, before the drill-or-drop decision. UOG in the meantime asked for more time and it has now been granted an extension.
UOG said Wednesday: "There is strong evidence of a hydrocarbon system in Jamaica, including source, reservoir, and seal rocks. An independent evaluation by Gaffney Cline & Associates, as announced by the Company in December 2020, of 11 high-graded leads and prospects indicated the potential for a combined estimated 2.4 billion barrels mean prospective resources. United started a formal farm-out process for the Walton Morant Licence earlier this year. The Company is seeking a strategic drilling partner(s) with a view to drilling the primary 3D seismic defined Colibri prospect, which is estimated to hold mean prospective resources of 406 million barrels."
Brian Larkin, UOG CEO said:"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. 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. 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."