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Directorate Change: Significant Strengthening of Board and Senior Management Team

Independent Oil and Gas plc ("IOG" or the "Company") (AIM: IOG.L), the development and production focused oil and gas company, announces the following Board and senior management appointments and changes effective 20th March 2017. 

Highlights:
  • IOG Board and senior management team significantly strengthened through the appointment of:
    • Andrew Hockey joins the board as Deputy Chief Executive
      • 35 years’ experience in the oil and gas industry most recently with Fairfield Energy and Sound Energy
      • Led the early development of Clipper South, a successful SNS producing gas field which is analogous to IOG’s Vulcan satellites development
    • Hywel John joins the board as Chief Financial Officer
      • Previously CEO of Bayfield Energy, CFO of Candax Energy and senior executive at Burren Energy
    • The Right Honourable Charles Hendry appointed Non-Executive Director as a nominee of the Company’s major stakeholder, London Oil & Gas Limited, a major investor in IOG
      • Minister of State for Energy between May 2010 and September 2012
    • David Peattie resigns from the Board, with immediate effect, as a consequence of his appointment as Chief Executive of the Nuclear Decommissioning Authority
    • Mark Routh, IOG’s Chief Executive Officer, is appointed Chairman on an interim basis
    • Peter Young leaves the board and takes up a new role as Head of Business Origination
      • Strong track record in business origination, M&A and Finance
    • Graham Cox joins as SNS Project Manager
      • Previously Project Manager on the Clipper South Development
Mark Routh, CEO of IOG, commented: 

We are delighted to announce the new additions to our Board and senior management team as the Company enters its next stage of growth. Charles, Andrew, Hywel and Graham all have outstanding track records and deep sector knowledge and it reflects the inherent strength of our business and excellent portfolio of assets that we can attract individuals of their calibre.

Andrew successfully led the development of Clipper South, a successful SNS producing gas field which we believe has certain similarities in discovery, geology and production to IOG’s Vulcan satellites development. His operational and development execution capabilities will be of huge benefit to the Company.  Graham worked alongside Andrew at Clipper South and we are excited to be welcoming him to the operational team.
“Hywel’s wide ranging financial and commercial capabilities and in-depth knowledge of the oil and gas industry and investment community will be of considerable significance to the Company as we continue to develop and grow.

Charles joins the Company at an exciting stage of our development and his deep knowledge and experience of the sector will be invaluable to the Board and management team. 

Peter’s move to Head of Business Origination is a natural progression given his track record leading the Company’s M&A activity to date and he remains committed as a member of the senior management team and significant shareholder to the continued success of IOG.  The Company has long been committed to balancing its portfolio and to that end considers that buying a producing asset is a key business driver and Peter being able to focus more fully on this activity should be hugely beneficial for IOG.

We are confident that these changes positions IOG strongly for the future as we look to become a leading North Sea production company.


Biographies
Having worked in the industry for 35 years, Andrew Hockey has significant sector experience. He has a technical background with a degree in geology from Oxford University and a Master’s Degree in petroleum geology from Imperial College London. Until the end of 2015 Andrew was General Manager of Business Developmentat UKCS oil and gas exploration and production company Fairfield Energy Limited which he helped to found in 2005. Andrew led the team to acquire Clipper South as an undeveloped discovery from Shell and Esso and then subsequently managed its development via farm down and funding through to first gas in 2012.  Andrew is now a non-executive director of Fairfield Energy and a founder of its parent company, Decom Energy Limited. Andrew has also served on the board of AIM-listed Sound Energy plc, an upstream company with onshore interests in Italy and Morocco, where he was a Non-Executive Director from 2011-2015 and Chairman from 2012-2014.

Joining as Chief Finance Officer is Hywel John who has 30 years of experience in the industry. He is a qualified chartered accountant with significant public company board level experience having served as CEO of Bayfield Energy, CFO of Candax Energy, a TSX listed company and Company Secretary / Legal and Commercial Director at Burren Energy. 

Charles Hendry was Minister of State for Energy from May 2010 until September 2012. Since leaving ministerial office he has undertaken a wide range of roles, including as President of the British Institute of Energy Economics, chair of the Forewind Consortium from 2013-2015, and in 2016 he was appointed by the UK Government to lead a review into the strategic case for tidal lagoons and their role in the UK energy mix.  Charles Hendry is a nominee of London Oil and Gas Limited, a committed funding partner of IOG. 

Graham Cox has 32 years’ experience in oil and gas having worked on several large developments. Graham was the Clipper South project manager and was instrumental in establishing the design and operational basis for the Clipper South offshore platform.  At the point of sale to RWE he was transferred with the asset where he became the engineering manager through all phases of engineering and project completion.

The following information is disclosed pursuant to Schedule Two paragraph (g) of the AIM Rules for Companies:

Andrew Raymond Hockey
Mr Hockey (aged 57) has been a director of the following companies during the five years preceding the date of this announcement:
 
Current directorships Previous directorships
Taiga Energy Fairfield Energy No. 1 Limited
Fairfield Energy Limited Ineos Clipper South B Limited
Andrew Hockey Advisory Limited Ineos Clipper South C Limited
Decom Energy Limited Sound Energy Plc
Fairfield Energy Holdings Limited  Sound Energy Holdings Italy Limited
Fairfield Fagus Limited      
Fairfield Betula Limited   

Hywel Rhys Richard John 
Mr John (aged 53) has been a director of the following companies during the five years preceding the date of this announcement:
 
Current directorships Previous directorships
None     Trinity Exploration and Production (Pletmos) Limited
  Bayfield Energy (Alpha) Ltd
  Trinity Exploration and Production Services (UK) Limited
  Bayfield Energy Limited
  Bayfield Energy New Ventures Limited
  Trinity Exploration & Production Plc
  Bayfield Energy (Beta) Ltd
 
There is no further information to be disclosed pursuant to Schedule Two paragraph (g) of the AIM Rules for Companies.

Charles Hendry
Mr Hendry (aged 57) has been a director of the following companies during the five years preceding the date of this announcement:
 
Current directorships Previous directorships
Bombo Limited None
London Oil & Gas Limited      
Eurasia Partners Ltd     
Blair Estate (Scotland) LLP      
British Institute of Energy Economics (The)      

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.
 

About Independent Oil and Gas:
IOG is an oil and gas company with established assets in the UK North Sea.  The company's strategy is to deliver near term development and production assets in North West Europe, through its extensive technical and commercial expertise, whilst maintaining some exposure to exploration upside.  The company is looking to grow both organically and through acquisition.

All IOG’s licences are owned 100% and operated by IOG.

Further information can be found on www.independentoilandgas.com 

About the Vulcan Satellites:
The Vulcan Satellites consist of three fields, Vulcan East, Vulcan North West and Vulcan South, which hold independently estimated 2C resources of 77.4 BCF, 131.3 BCF and 112.0 BCF respectively, 320.7 BCF collectively.  These fields lie in Block 49/21a (Licence P039), Block 49/21d (Licence P2122), Block 48/25b (Licence P130) and Block 49/21c (Licence P1915) in the UK sector of the Southern North Sea.  They lie approximately 30-45km east of IOG’s 100%-owned Blythe field and are considered ready for development with no further appraisal required.  The Company is preparing Field Development Plans for these three fields which will form a gas hub.  IOG has assumed liability for decommissioning a suspended well on Vulcan East, which in April 2015 was independently estimated to cost £3.0 million as part of a development campaign, based on prevailing rig rates at that time.

About the Blythe Hub:
The Blythe hub licences comprise Blythe, Elgood, Hambleton, Truman and Harvey.

About Blythe:
The Blythe gas discovery in the Rotliegendes Leman formation straddles Blocks 48/22b and 48/23a in the Southern North Sea in licence P1736.  The Blythe Leman reservoir needs no further appraisal and has independently verified 2P reserves of 34.3 BCF (6.1 MMBoe).  (Source: ERC Equipoise Competent Person’s Report (“CPR”) dated September 2013.)  The Blythe licence has been extended to 31 December 2017.  The Company submitted a draft field Development Plan to the Oil & Gas Authority in December 2016.  Subject to completion of the pipeline acquisition, the Company intends to submit the full field development plan on a combined Blythe and Elgood development in the first half of 2017.

Gas tested to surface from three separate intervals in the Carboniferous beneath the Blythe Leman gas discovery from one of the Blythe discovery wells, 48/23-3 drilled by Arco in 1987.  The maximum rate achieved was 0.9 MMcfd from an unstimulated vertical test.  (Source: End of well report 48/23-3 – November 1987.)  This was deemed uncommercial at the time, before the advent of horizontal multi-fracture stimulated wells.  Further technical work including seismic reprocessing and remapping needs to be completed to evaluate this potential resource to refine the gas-in-place estimates which are between 70 BCF and 310 BCF.  (Source: Tullow Oil 48/23a Relinquishment Report – May 2009.)

Oil has flowed to surface from the naturally fractured Zechstein Carbonates in the Hauptdolomit formation above the Blythe Leman gas discovery from two wells.  Well 48/22-1 drilled by Burmah in 1966 flowed 39° API oil at rates up to 2,000 barrels per day (Source: Composite well log 48/22-1 – October 1966) and well 48/23-3 drilled by Arco in 1987 at flowed 38° API oil at a maximum rate of 1,128 barrels of oil a day.  (Source: End of well report 48/23-3 – November 1987.)  The extent of the structure and potential oil resources in the Hauptdolomit remains unknown.  Previous estimates considered that the mapped closure was probably small.  Oil-in-place has been estimated between 2 MMBbls and 4 MMBbls.  (Source: Tullow Oil 48/23a Relinquishment Report – May 2009.)  Further evaluation and re-mapping is continuing now that a development will proceed on the main Blythe gas discovery.

About Harvey:
IOG has a 100% working interest in licence P2085 to the east of Blythe (Blocks 48/23c & 48/24b) which was awarded in the 27th licensing round.  Recent 3D seismic reprocessing and remapping by Beagle Geoscience Limited has led to an improved understanding of the complex faulting that exists in the overlying strata.  Based on this work, the internal management probabilistic estimates of the P90/P50/P10 gas initially in place for Harvey are 77/176/403 BCF and probabilistic estimates of the P90/P50/P10 resources are 44/113/290 BCF.

IOG is now considering committing to a firm appraisal well on Harvey which would be required before a reservoir model could be built and a development plan could be prepared.  If an appraisal well was to be drilled successfully and Harvey was subsequently developed, the Company believes that it could be tied back to the same pipeline as the Blythe and Vulcan Satellite hubs.

About Elgood:
IOG has a 100% working interest in licence P2260 awarded in the 28th licensing round to the west of Blythe containing the Elgood discovery (Block 48/22c).  Elgood was drilled by Enterprise Oil in 1991 and tested gas to surface at 17.6 MMcfd but was not progressed by Enterprise due to size and gas prices at that time.

IOG is now working on the development plan for Elgood to be submitted in conjunction with the Blythe field development plan and will commission a CPR‎ to confirm the resources over this area.  Based on the work undertaken by Beagle, the internal management probabilistic estimates of the P90/P50/P10 gas initially in place for Elgood are 26/35/48 BCF and probabilistic estimates of the P90/P50/P10 resources are 15/22/31 BCF.

SNS portfolio:
The probabilistic Gas Initially in Place and resources estimates for IOG’s SNS portfolio of Blythe, Elgood, Harvey and the Vulcan Satellites are as follows:
 

SNS Portfolio Gas Initially in Place Estimated resources
Field (BCF) (BCF)
  P90 P50 P10 P90 P50 P10
Blythe 39 52 84 22 34 48
Elgood 26 35 48 15 22 31
Harvey 77 176 403 44 113 290
Vulcan North West 184 215 251 112 131 153
Vulcan East 104 124 145 64 77 91
Vulcan South 117 186 275 59 112 193
Totals 547 789 1206 315 490 806

This does not include other discoveries that may be sub-commercial, or potential additional resources that could be recovered from the carboniferous sections or other undrilled prospects in the SNS portfolio.

About Skipper:
The Skipper oil discovery is in Block 9/21a in the Northern North Sea in licence P1609.  IOG owns 100% of the Skipper licence P1609 and is the Operator.  In July/August 2016 the Company successfully drilled its first operated appraisal well and retrieved oil samples, in order to design the optimum field development plan.  Skipper has independently verified gross 2C resources of 26.2 MMBbls.  Following the results from the appraisal well, IOG management’s estimates of the oil in place in the Skipper reservoir are minimum/most likely/maximum 119.3/142.6/168.3 MMBbls.  Recovery factor estimates will be revised during the full field reservoir simulation studies which are now underway.

Competent Person’s Statement:
In accordance with the AIM Note for Mining and Oil and Gas Companies, IOG discloses that Mark Routh, IOG's CEO is the qualified person that has reviewed the technical information contained in this announcement.  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.