03 Oct 2017
Letter of Intent signed for up to four Southern North Sea platformsIndependent Oil and Gas plc ("IOG" or the "Company"), the development and production focused Oil and Gas Company, is pleased to announce that it has signed a Letter of Intent (“LOI”) with Heerema Fabrication Group. (“Heerema”) for Front End Engineering and Design (“FEED”) and Engineering, Procurement, Construction and Installation (“EPCI”) of up to four Normally Unmanned Installation platforms (“NUIs”).
- The NUIs will be utilised for IOG’s Southern North Sea (SNS) gas project, which consists of the Blythe Hub and Vulcan Satellites Hub developments.
- FEED costs will be fully deferred and EPCI costs are to be 50% deferred.
- The LOI is a further demonstration of our commercial model aligning the incentives of all project partners.
- The FEED work is a key step towards reaching Final Investment Decision (“FID”) on the SNS gas project, which is targeted by the end of the first quarter of 2018. The LOI is to be followed by a full contract covering both FEED and EPCI, which is expected to be signed before year end.
The intention is that FEED costs are to be fully deferred and EPCI costs are to be 50% deferred until First Gas from the SNS gas project. This would significantly reduce IOG’s funding requirements for the project.
Mark Routh, CEO and Interim Chairman of IOG commented:
“We are very pleased to be working with Heerema on the platforms for our Southern North Sea developments. This LOI reflects the strong operational progress the team continues to make delivering on our strategy. Heerema are a very experienced and accomplished platform fabricator and FEED will start immediately with a view to adapting an established UK Southern North Sea design previously built by Heerema. Efficient platform fabrication and installation will be critical to the successful and timely development of our two gas hubs, and Heerema represents the best technical and commercial solution to achieve this.
Our commercial model aligns the incentives of all project participants towards the efficient delivery of IOG’s substantial gas resources and the intended cost deferral will contribute significantly to funding the portfolio into production. We look forward to finalising the contract with Heerema and agreeing similar terms with other key contractors to continue implementing our gas hub strategy for the undersupplied UK market.”
About Independent Oil and Gas:
IOG owns substantial low risk, high value gas resources in the UK Southern North Sea. The Company is targeting 170 MMcfd gas production from its substantial current portfolio via an efficient hub strategy. Alongside this it continues to pursue value accretive acquisitions, to generate significant shareholder returns. All of IOG's licences are owned 100% and operated by IOG.
Further information can be found on www.independentoilandgas.com
About Heerema Fabrication Group:
Heerema Fabrication Group (HFG) specializes in the engineering and fabrication of large and complex structures for the offshore oil & gas and energy-related industries. Recent examples include Clipper South, Ensign, Babbage and Breagh Alpha. More information can be found at: https://hfg.heerema.com/