UEN Urals EN.

RNS No 5160e
UNITED ENERGY PLC
28th September 1998


Highlights

     Compared to First Half 1997:

          Production increased by 23% to 1,975 boepd.
          
          Reserves up by 60% to 5.1 million boe.
          
          Operating costs per boe reduced by 9%.
          
          26% fall in product prices results in loss of #188,000.
          
          Evaluated Net Assets per Share remain the same at 29p.


     Compared to 31 December 1997:

          Average daily production increased by 29%.
          
          Oil and gas reserves increased by 22%.
          
          Operating costs per boe reduced by 6%.


     Other Highlights:

          Continued development drilling success in the Sullivan Deep Field.
          
          Strong production contribution from drilling successes in SW Speaks
          Field.
          
          Tight management controls continue to improve operating efficiency.
          
          Further development drilling in SW Speaks expected in the second
          half.


Chairman's Statement

During the six months to 30 June 1998 the Group achieved strong growth in
production and reserves, which have again both reached record levels.  This
solid progress has been eroded by weak product prices and as a consequence I
have to report a loss of #188,000.


Group Results

The results for the first half of 1998 were strongly influenced by very weak
oil prices which adversely impacted gas prices.  Compared to the first six
months of 1997, average received oil prices were down 33% at US$13.22/bbl and
gas prices down 12% at US$2.18/mmscf.  Despite a 23% increase in production,
turnover and operating cashflows were down 9% and 33% respectively.  Had the
product prices we received in the first half of 1997 continued, we would have
reported a profit of just under #700,000 for the six months to 30 June 1998.


Production and Reserves

Production for the first six months averaged 1,975 boepd, up from 1,611 boepd
over the same period in 1997, and should average over 2,200 boepd for the
second half of 1998.   Proved reserve volumes increased by 60% to 5.1 mboe.
These reserve gains have been offset by weaker pricing and the Evaluated Net
Assets per Share at 29 pence remain the same as at the end of the first half
of 1997.


Finance

Net operating cashflows fell by 33% to #1.1 million, representing 2.8 pence
per share.  Although well down on last year, this reflects the Company's
ability to generate significant cash even during periods of very weak prices.
Despite the strong positive cashflows, gearing has risen to 124% from 77% at
the year end, as a direct result of two acquisitions referred to below and the
ongoing drilling program.  Readily available bank facilities, based on the
recently completed borrowing base review amount to #750,000.


Drilling Program

Five wells were drilled during the first half of which three were successful.
The Sullivan Deep A No2 and the Perez Alaniz Deep A No1 both confirmed the
presence of additional reserves for exploitation in the Ann Mag area.  The
Sullivan AA No1 did not encounter the southern extension to the Perez Deep
prospect that was prognosed, but was completed as a producing gas well in a
separate sand.

On our royalty interest prospect at SW Speaks, Costilla Energy drilled three
wells during the first half, two of which were successful and the third is due
to be side-tracked later this year.

Since the mid year a further two wells have been drilled and a third is
currently drilling.  The Sullivan Deep A No3 confirmed a further extension of
the Sullivan Deep prospect and is producing around 55 boepd to our interest.

In SW Speaks, Costilla Energy drilled another successful well on the Mitchell
Lease which is contributing around 120 boepd net to our interest and have
staked a fifth well location, whilst on the Simpson Lease two further wells
are currently being drilled.


Acquisitions

During the first half we made two acquisitions for US$2.76 million adding
around 690 mboe of reserves.  We purchased a 100% working interest in the
Hankamer and South Liberty Fields in Chambers County, Texas, which we operate
as well as a series of minority working interests in four fields in
Mississippi operated by Swift Energy.  We have made a number of production
enhancements in the Chambers County Fields, and AmBrit's operated properties
now account for 40% of the Group's total daily production.


Agrigen

As noted in the 1997 Report & Accounts, Northampton Borough Council rejected
our revised planning application in December 1997, having passed a resolution
to grant planning permission for a similar scheme in 1992.  We have spent the
bulk of this year preparing for the Planning Inquiry which is scheduled to
commence towards the end of October, with a decision expected around the end
of the year.  The comprehensive preparation that the UK team have undertaken
for the Inquiry leads me to view the outcome with cautious optimism.


Outlook

The wells currently drilling and those planned for the second half give scope
for further production and reserve increases over and above those achieved to-
date.  While improved product prices are expected to occur later in the year,
your Company's good cash margins and tight cost controls will ensure that it
remains on a sound financial footing during this period of weak pricing.

Your Board is acutely aware of the need to deliver shareholder value and over
the past few years has done much to improve the quality of the reserve base
and increase production output.  Strategically we are reviewing a range of
options to realise the underlying  value.


John Billington
Chairman

28 September 1998


         Unaudited Group Results for the Six Months ended 30 June 1998

                  Six months ended  Six months ended   Year ended
                    30 June 1998     30 June 1997    31 December 1997
                        #000             #000             #000

Turnover                2,698            2,971            5,507

Cost of sales:

Production costs       (1,053)            (948)          (1,760)
Depletion of oil
and gas interests      (1,051)            (909)          (1,665)

                       (2,104)          (1,857)          (3,425)

Gross profit              594            1,114            2,082

Administrative 
expenses                 (446)            (446)            (857)

Operating profit          148              668            1,225

Loss from interests
in associated
undertaking               (11)               -              (26)

Interest receivable         5                9               23
Interest payable         (330)            (177)            (394)

(Loss)/profit on 
ordinary activities
before taxation          (188)             500              828

Taxation                    -              (35)             (25)

(Loss)/profit on 
ordinary activities
after taxation           (188)             465              803

(Loss)/earnings
 per share                 (0.5p)            1.2p             2.1p



               Unaudited Group Balance Sheet as at 30 June 1998

                             30 June 1998 31 December 1997
                                 #000           #000

Fixed assets

Intangible exploration assets   13            188

Oil and gas interests       13,354         10,628

Other tangible assets           83             98

Investments                    520            389

                            13,970         11,303

Current assets

Debtors                      1,391          1,137

Cash at bank                   457            691

                             1,848          1,828


Creditors: amounts 
falling due within
one year                    (1,553)        (1,008)

Net current assets             295            820

Total assets less
current liabilities         14,265         12,123

Creditors: amounts 
falling due after
more than one year          (8,096)        (5,683)

Net assets                   6,169          6,440


Capital and reserves

Called up share capital      3,889          3,889

Share premium account          272            272

Other reserves:
 capital reserve               717            717

Profit and loss account      1,291          1,562

Shareholders funds-equity    6,169          6,440


Notes

1. The figures above do not constitute statutory accounts within the meaning
of Section 240 of the Companies Act 1985.  The comparative figures for the
year ended 31 December 1997 have been extracted from the statutory accounts
for that year, on which the auditors reported without qualification, and which
have been filed with the Registrar of Companies.

2. The interim results for the six months ended 30 June 1998 are unaudited and
have been prepared in accordance with the accounting policies adopted in the
statutory accounts for the year ended 31 December 1997 as modified by the
adoption of new financial reporting standards.

3. The directors do not propose to recommend the payment of an interim
dividend (1997: nil).

4. These interim results are being circulated to shareholders and are
available upon request from the Company's Head Office at 51 The Promenade,
Cheltenham, Gloucestershire GL50 1PJ (Tel: 01242 253773).


END

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