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UKOG's onshore odyssey continues

Gatwick-area oil and gas developer trading back at pre-discovery levels amid local hostility
July 3, 2019

Since the big discovery at Horse Hill in 2015, UK Oil & Gas (UKOG) has kept moving along the path to production, despite getting tripped up occasionally by protests, the oil price and its own grandiose pronouncements. 

IC TIP: Sell at 0.98pp

The developer’s viability will only be properly tested after it is granted full exploitation rights to the area near Gatwick airport, as that is when it will put together a full report on the reserves at the site. 

That process has been ticking along, but a fully approved operation will be some time off, as the first hearing with Surrey County Council isn't until September and UKOG did not give a timeline on the Environment Agency approving permanent production permission. 

Under the exploration permission, the company has been producing an average of 220 barrels of oil per day (bopd) from the Portland test well, and sold £1.6m of crude oil in the six months to 31 March. The company has said it can get Portland to 720-1,080bopd by the end of 2019. 

UKOG’s share price has been on a steady decline since a big run of results at Horse Hill in 2017, which briefly took it over 8p. Its travails should send out a sobering message to any investors who have been talking up the recent gas discovery near Hull by Reabold Resources, Union Jack Oil and Rathlin Energy.

UK OIL & GAS (UKOG)   
ORD PRICE:0.98pMARKET VALUE:£59.6m
TOUCH:0.95-1p12-MONTH HIGH:3pLOW: 0.92p
DIVIDEND YIELD:naPE RATIO:12
NET ASSET VALUE:0.65pNET CASH:£4.94m
Half-year to 31 MarchTurnover (£'000)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2018116-4.4-0.12nil
2019103-1.7-0.04nil
% change-11---
Ex-div:na   
Payment:na   
*As of 30 September 2018