01 Mar 2017
Directorate Change: IOG Chairman to Become Chief Executive of the Nuclear Decommissioning AuthorityIndependent Oil and Gas plc ("IOG" or the "Company") (AIM: IOG.L), the development and production focused Oil and Gas Company, announces forthcoming changes to the Board of Directors.
It has been announced today that David Peattie, the non-executive Chairman of IOG, has accepted the role of CEO of the Nuclear Decommissioning Authority (the “NDA”), commencing 1 March 2017. In order to fulfil this significant full-time appointment, David will be stepping down as Chairman of IOG on 31 May 2017 or once a new chairman is appointed, whichever is sooner.
Mark Routh, CEO of IOG, commented:
It is a huge accolade for David to be selected for this crucially important governmental appointment and it is right and proper that he must now devote his energies to this role. David will continue as chairman in the near-term while the Board selects a suitable replacement and the search process is underway. David has been instrumental to the Company’s progress since joining the IOG Board as Chairman last July. Whilst I am personally sorry to lose him, I take great comfort from IOG’s ability to attract someone of David’s calibre to be our chairman. We wish David every success in this role of national significance and have no doubt he will do a superb job.
David Peattie, Chairman of IOG, commented:
It has been a great pleasure heading up the Board of IOG during a crucial time of significant expansion for the company. Over the past year IOG has made major additions to its Southern North Sea gas asset portfolio with the buy-out of the Blythe gas discovery and the acquisition of the Vulcan Satellite discoveries. This has taken the Company’s most likely contingent gas resources from around 44 BCF to more than 490 BCF. The Company is now very well placed to develop these gas assets with a route to market being secured and Field Development Plans scheduled for submission in the coming months. I will continue to help IOG to progress its significant development plans and ensure a smooth transition to a new Chairman.
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 of 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.
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.
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.
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.
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|
|Vulcan North West||184||215||251||112||131||153|
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.
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.