01 Feb 2018
Operational Update February 2018Independent Oil and Gas plc ("IOG" or the "Company"), the development and production focused Oil and Gas Company is pleased to provide an update on the operational progress of its Southern North Sea gas hub developments.
Blythe and Vulcan Satellites Hub Developments
The Company continues to make progress at its two 100% owned gas hubs, which consist of five fields with independently verified 2P reserves of 303 BCF. The Environmental Impact Assessment has been submitted for the Blythe hub, which includes the Blythe and Elgood fields, in line with milestones agreed with the Oil & Gas Authority (“OGA”).
IOG remains on track for Field Development Plan (“FDP”) approvals for both hubs by the end of August 2018, in line with agreed OGA milestones. First gas is scheduled for Q4 2019, subject to project financing. The Company expects to issue an update on funding shortly as well as further operational updates on contractors and project schedule in due course. In the meantime, the Company remains reliant for its general and administrative costs on the loan financing in place with London Oil & Gas.
Preparatory work on the Thames Pipeline continues to progress in line with the Company’s plan to capture this major strategic asset at minimal cost. Upon recommissioning, the line will be an important piece of export infrastructure, turning stranded fields into valuable gas assets with direct market access. This will save the Company up to £100m in capital costs and opex of a similar order or magnitude over project life, as well as creating a strategic area of opportunity for the Company potentially to acquire and develop further assets in due course.
The regulatory approvals process is now at an advanced stage for the acquisition of the Thames pipeline which will include the appointment of the Company’s wholly owned subsidiary, IOG Infrastructure Ltd, as the pipeline operator. The Sale and Purchase Agreement completion deadline has been extended by one month to the end of February 2018 to facilitate this.
Operational work continues in parallel with the pipeline acquisition closing process. On 27 January 2018, IOG mobilised the MV Fugro Galaxy to undertake an extensive site survey programme. This covers the Thames Pipeline and the proposed pipeline routes connecting it to all five fields, as well as all rig and platform locations. This is an important step ahead of intelligent pigging operations on the Thames Pipeline, which is required to confirm integrity and fitness for purpose as the Company’s key export route.
Mark Routh, CEO and Interim Chairman of IOG commented:
We continue to make good operational progress and remain on track for first gas from our 100% owned gas hubs in 2019. Recommissioning an export pipeline is an unprecedented initiative in the North Sea which will make a substantial contribution to maximising economic recovery from UK waters and open up new strategic opportunities for IOG. We are now in the very final stages of approvals for this acquisition. With the support of our industry partners we are delivering a stable export route for our gas to the structurally undersupplied UK gas market. We look forward to providing more project and funding updates in due course.
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.
Further information can be found on www.independentoilandgas.com