23 May 2018
30th UKCS Licensing Round AwardsIndependent Oil and Gas plc ("IOG" or the "Company"), the development and production focused Oil and Gas Company, is pleased to announce that its wholly owned subsidiary IOG North Sea Limited has been offered all three of the new licence areas, comprising four blocks in total, that it had applied for in the 30th UKCS Licensing Round. IOG’s interests are 100% in all offered areas.
- Block 48/24a, contiguous to the east of the Harvey licence, giving IOG 100% of the mapped Harvey structure and increasing IOG’s mid case prospective resources by 24 BCF to 114 BCF. This block also contains other discoveries and prospects details of which will be available on the IOG website in due course.
- Blocks 48/11c & 48/12b, containing the Glein discovery, which IOG intends to rename Goddard, with estimated 2C contingent resources of 189 BCF.
- Block 53/1b, containing the Aberdonia discovery, which IOG intends to rename Abbeydale, estimated 2C contingent resources of 11 BCF.
- All three licence areas are within potential tie-back range of IOG’s recently acquired Thames pipeline, which IOG intends to recommission as part of the Blythe and Vulcan Satellites gas hubs development.
- The 2017 ERC Equipoise Competent Person Report (CPR) gave a best estimate gross unrisked Net Present Value (NPV10) of £159 million for 100% of the Harvey structure fully risked Expected Monetary Value (EMV) of £79 million.
- IOG has an existing licence commitment to drill an appraisal well on Harvey by September 2019 and is evaluating the potential to accelerate this to Q4 2018.
Block 48/24a contains the easternmost extension of IOG’s Harvey structure and several other dormant discoveries and prospects. On this licence the work commitment is to reprocess existing 3D seismic data to Pre-Stack Depth Migration level. This work is already underway with Schlumberger WesternGeCo, given IOG already holds block 48/24b where the bulk of the Harvey structure lies, and is expected to complete next month. Gross Prospective Resources in the Harvey structure are judged to be 45/114/286 BCF (Low/Best/High Estimates) in the ERCE Competent Persons Report dated November 2017. IOG is committed to drill an appraisal well on Harvey by September 2019 but is evaluating the potential to accelerate this to Q4 2018. Resources in the other discoveries and prospects on the block will be subject to evaluation and appraisal following the results of the 3D seismic reprocessing.
Goddard Blocks 48/11c & 48/12b:
Blocks 48/11c & 48/12b contain Goddard, hitherto known as Glein, which is a dormant gas discovery proved up by five wells drilled between 1985 and 2010. Management estimates of the contingent resources on Goddard are 1C/2C/3C 45/189/396 BCF. The work commitment on this licence is to reprocess existing 3D seismic data to Pre- Stack Depth Migration Level and to drill one firm well within 3 years from licence award. The intention is to move Goddard into development and production at the earliest opportunity. There are a number of potential export routes, including tying into IOG’s other gas hub developments.
Abbeydale Block 53/1b:
Block 53/1b contains the Abbeydale dormant gas discovery, hitherto known as Aberdonia, which was discovered in 1996. On this licence the work commitment is to reprocess existing 3D seismic data to Pre-Stack Depth Migration level. Management estimates of the contingent resources on Abbeydale are 1C/2C/3C 5/11/24 BCF. The new 3D seismic work programme is expected to increase these estimates to more commercial levels with a view to tying into IOG’s Thames pipeline as the export route.
All three licence areas offered to IOG in the 30th Licensing Round are within potential range of the recently acquired Thames pipeline. These applications specifically focused on further developing the Company’s gas hub strategy. The Thames Pipeline Intelligent Pigging Programme is currently ongoing and the Company will update all stakeholders on progress in due course.
Andrew Hockey, CEO of IOG commented:
We are delighted that the OGA has offered IOG these blocks which contain at least three additional gas discoveries to be developed in line with our Southern North Sea gas hub strategy. We made very targeted applications in the 30th UKCS Licensing Round where we saw potential to add tangible value to our portfolio, and it is very pleasing to see all three applications successful.
Today’s awards materially enhance our position in the Southern North Sea, increasing our total gas resource base of 2P reserves + 2C resources + Best Estimate Prospective Resources from 393BCF (68MMBOE) to 617BCF (106MMBOE). This is an increase of 224 BCF (38MMBOE), all of which lies within range of our Thames Pipeline infrastructure. We have already done significant technical work on these new assets and are confident that they can become further high-value developments for IOG in line with our goal of becoming a significant UK gas development and production company.
Certain information communicated in this announcement was, prior to its publication, inside information for the purposes of Article 7 of Regulation 596/2014.
|Independent Oil and Gas plc
Andrew Hockey (CEO)
James Chance (CFO)
|+44 (0) 20 3879 0510|
Christopher Raggett / Anthony Adams
Emily Morris / Camille Gochez
|+44 (0) 20 7220 0500|
Georgia Edmonds / Tom Huddart / Monique Perks
|+44 (0) 20 3757 4980|
About Independent Oil and Gas:
IOG owns substantial low risk, high value gas Reserves in the UK Southern North Sea. The Company is targeting a 2P peak production rate in excess of 200 MMcfd (c. 35,000 Boe/d) from its substantial current portfolio (2P Reserves of 303 bcf) via an efficient hub strategy. Alongside this it continues to pursue value accretive acquisitions, to generate significant shareholder returns. All IOG's licences are owned 100% and operated by IOG.
Competent Person’s Statement:
In accordance with the AIM Note for Mining and Oil and Gas Companies, IOG discloses that Mark Routh, IOG’s Chairman is the qualified person that has reviewed the technical information contained in this document. Mark Routh has an MSc in Petroleum Engineering and has been a member of the Society of Petroleum Engineers since 1985. He has over 35 years’ operating experience in the upstream oil and gas industry. Mark Routh consents to the inclusion of the information in the form and context in which it appears.
Further information can be found on www.independentoilandgas.com