14 Jul 2017
Award of new licenceIndependent Oil and Gas plc ("IOG" or the "Company") (AIM: IOG.L), the North Sea development and production focused Oil and Gas Company, is pleased to announce that it has been awarded a new licence by the UK Oil and Gas Authority ("OGA") in the 2016 Supplementary Offshore Oil and Gas Licensing Round, comprising Block 48/25a. The licence includes the western part of the Vulcan North West discovery that extends into 48/25a and also includes the Hogsback, Hobson and Goacher prospects.
Vulcan North West
Vulcan North West is a key part of the Company's Vulcan Satellites hub development. It is a discovery with independently estimated P50 gas initially in place of 215 BCF and 2C recoverable resources of 131 BCF. 18% of the discovery is estimated to be in the new licence 48/25a, so the award of this licence secures 24 BCF of 2C resources for the Company.
The Vulcan Satellites field development planning is progressing very well with all three fields expected to be tied back to the Thames Pipeline which is in the process of being acquired and recommissioned by the Company.
The new licence will be included in the Field Development Plan ("FDP") that is currently being drafted and will also be included in the new Competent Person Report ("CPR") that is being prepared by ERC Equipoise. The CPR for the Blythe hub, consisting of the Blythe and Elgood fields, should be received within the coming weeks. The CPR for the Vulcan Satellites is targeted by the end of the third quarter.
Hogsback, Hobson and Goacher
The Hogsback Leman gas prospect is a tilted fault block to the west of Vulcan North West. It is on-trend and up-dip from the 48/24b-2 gas discovery drilled by Hess in 1990. It is estimated by the Company to have a technical chance of success of 44% with a most likely gas in place of 30 BCF and most likely resources of 18 BCF of which 96% is on block.
Hobson is an oil discovery but currently there is significant uncertainty regarding its size with minimum, most likely and maximum oil in place estimates of 1 MMBbls, 2 MMBbls, 18 MMBbls respectively. 59% of the Hobson discovery is on the newly awarded block. Should any decision be taken to drill, Hogsback and Hobson could be appraised with a single well.
Goacher is a Leman gas prospect which is a relatively low relief faulted anticline with a most likely gas in place of 71 BCF. The Company currently estimates that the technical chance of success is 29% with 36% on the newly awarded block.
Mark Routh, CEO and Interim Chairman of IOG commented:
We are pleased to have been awarded this licence by the OGA in the Supplementary Licensing Round which secures and adds further gas resources to our dual gas hub strategy. The award is further endorsement of our technical and environmental competencies as a SNS development operator and extends our licence coverage in this core strategic region for IOG.
Our SNS field development work continues to progress very well in the meantime. Static reservoir models have now been built for our entire SNS portfolio and dynamic reservoir modelling is also almost complete. This will provide our own best estimates of the recoverable reserves and production profiles for both hubs. The IOG team remains very focused on the many ongoing development activities, with technical subsurface, well engineering, pipeline and facilities engineering, environmental assessments, survey preparation and intelligent pigging preparation work all in progress alongside the financing, commercial and gas offtake negotiations. We are on track to submit the Blythe/Elgood FDP very soon and the Vulcan Satellites FDP in 3Q 2017 once the reservoir modelling work is finished. We expect to be releasing further news as each stage of the dual gas hub strategy reaches each significant milestone.
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 current portfolio of 500 BCF (88 MMBoe) via an efficient gas 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.