|By Marketwired .||
|May 7, 2014 01:25 PM EDT||
CALGARY, ALBERTA -- (Marketwired) -- 05/07/14 -- In response to ongoing shareholder and market speculation, United Hydrocarbon International Corp. ("United" or the "Company") is pleased to provide this corporate update. The Company has an active program underway, including exploration and development drilling, seismic and production facility construction. United continues to enjoy the support of its major shareholder, Dundee Corporation, who to date has invested in excess of $160 million in United and continues to fund the Company's exploration and development activities in Chad. United commenced its drilling program on January 3, 2014 and to date has drilled three wells resulting in two successful oil wells (a development well at Belanga-1A and an exploration well at Belanga North-1) and one dry hole (Toura-1 exploration well). A third exploration well is drilling at Dadou-1.
Doba Basin Exploration and Development Program
The Company has recently completed a 146 square kilometer 3D seismic program over the Belanga oil discovery and a 57 square kilometer program over the M'Biku oil discovery. The Belanga 3D data is now in Calgary for processing and interpretation will commence soon. The M'Biku 3D program has also been completed with data expected to arrive shortly. The Company is also shooting an additional 174 kilometers of 2D seismic in specific areas of Blocks DOC and DOD to refine existing exploration prospects.
As a result of the recent success of the Belanga North-1 exploration well, the Company's technical team have revised the geologic model of the Belanga discovery area with a resulting material increase in expected volume of recoverable oil. Based on a number of technical factors including sand thickness, water saturation and the lowest tested oil level in the three wells drilled at Belanga (Belanga-1, Belanga-1A and Belanga North-1), the Company has combined the well results with the available 2D seismic to conclude that Belanga and Belanga North are likely one contiguous structure. As a result, management believes the recoverable oil volumes estimated in the previous independent NI 51-101 report are likely conservative. Internal recoverable resource estimates range from 45 million to 100 million barrels of oil. An NI 51-101 compliant Reserve Report is currently being prepared by a qualified third party engineering evaluator and should be available in late May.
With completion of the recent technical work, United is proceeding with full field development of the Belanga structure, which will include the filing of an application for an exploration development area ("EXA") with the Government of Chad. Once drilling is finished at the Dadou exploration prospect (targeting the Upper Cretaceous sands found at Belanga and Belanga North-1), the rig will move back to Belanga to focus on development drilling. Planning is underway to order long lead items required to produce up to 15,000 bbl/d from the Belanga discovery by end 2015. Discussions have commenced with third parties to gain access to the export pipeline system.
Lake Chad Block
The 1.8 million square kilometer block contains two existing discoveries (Kanem and Kumia) which combined have an estimated 58 million barrels of recoverable resources as identified by previous operators. In addition, previous operators of the Block have identified with 7,400 kilometers of 2D seismic approximately 200 exploration leads or prospects on the block. These prospects range in size, but each have on average a minimum unrisked recoverable volume of oil of approximately 20 million barrels for an arithmetic total in excess of four billion barrels.
While the Company's current discovered oil on the Lake Chad Block is insufficient to support an independent pipeline to tie-in to the Chad-Cameroon export pipeline, the Company has commenced preliminary discussions with companies in the neighbouring country of Niger with respect to a joint venture to bring all parties' oil to southern Chad to connect to the export pipeline through Cameroon. Updates will be provided on this important project if and as it proceeds.
"We continue to be very encouraged by the significant results of our 2014 program in the DOC and DOD blocks in southern Chad," commented Ned Goodman, Chairman of the Board and Chief Executive Officer. "With the potential of the Belanga/Belanga North discovery now approaching 50 million barrels of recoverable oil, the Company's asset value is well in excess of invested capital to date. We are also very excited about the ongoing discussions we are having with interested parties with respect to funding this project through to production."
ABOUT UNITED HYDROCARBON INTERNATIONAL CORP.
United Hydrocarbon International Corp. is a private Canadian based company. United has a 100% working interest and is the operator of a Production Sharing Contract ("PSC") in Chad through its wholly-owned subsidiary United Hydrocarbon Chad Ltd. in two, world-class, oil bearing rift basins. The PSC includes four existing oil discoveries in four separate blocks of land that cover 5.3 million acres. The Company's directors and management team have successful track records identifying, acquiring, financing and operating onshore oil and gas assets internationally.
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This press release may contain forward-looking information that involves substantial known and unknown risks and certainties, most of which are beyond the control of United, including statements pertaining to the Company's drilling plans and operations. All statements included herein, other than statements of historical fact, are forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. Readers are cautioned to not place undue reliance on forward-looking statements. While United believes the expectations reflected in the forward-looking statements are reasonable, actual results and developments may differ materially from those contemplated by these statements depending on, among other things, issues encountered in drilling, completion and tie-in operations, the amount and timing of capital expenditures, the ability to finance those expenditures and other factors beyond United's control. Any forward-looking statements are made as of the date of this release and, other than as required by applicable securities laws, United does not assume any obligation to update or revise them to reflect new events or circumstances.