02 Nov 2017
Significant Prospective Resources Confirmed and Well Committed at HarveyIndependent Oil and Gas plc ("IOG" or the "Company"), the development and production focused Oil and Gas Company, is pleased to announce its commitment to drill an appraisal well on Harvey and the results of a Competent Person's Report ("CPR") on the Harvey licence by ERC Equipoise Limited ("ERCE").
- CPR confirms gross mid-case unrisked prospective gas resources for the Harvey structure of 114 BCF, in line with management estimates
- Minimum 45 BCF, most likely 114 BCF, maximum 286 BCF gross unrisked prospective gas resources on the Harvey structure
- Most likely 90 BCF on the Harvey structure licensed 100 per cent by IOG
- CPR assesses geological chance of success at 50%
- Plans underway to licence all Harvey resources
- Firm commitment made to the Oil and Gas Authority ("OGA") to drill an appraisal well on Harvey within 2 years
- CPR Executive Summary and updated corporate presentation on IOG website
Harvey lies directly between IOG's Blythe and Vulcan Satellites hubs. Upon successful appraisal, Harvey gas could be exported via the nearby Thames Pipeline, in line with IOG's hub strategy.
The CPR states that the Harvey structure lies up-dip of a well drilled in 1984 on the west flank of the structure that may have encountered a gas column of 30 ft in the Leman sandstone. An appraisal well is required to clarify the up-dip potential of the Harvey structure. Accordingly, IOG has committed to drilling an appraisal well on the Harvey structure by 20th December 2019. This is subject to acceptance and a licence extension by the OGA.
Subject to successful appraisal, IOG would request the OGA to determine the Harvey licence area to include the full structure. IOG's intention would then be to fast-track Harvey into development, exporting the gas via the recommissioned Thames Pipeline.
A Harvey development would be likely to have significant economic synergies with IOG's two nearby gas hubs.
A copy of the CPR executive summary and an updated corporate presentation are available on the IOG website.
Mark Routh, CEO and Interim Chairman of IOG commented:
It is very encouraging that the prospective resources in the Harvey structure have been independently confirmed to be in line with management estimates. The down-dip well demonstrated the presence of gas in the system and the presence of good reservoir quality in the Harvey area. This makes the maximum case of recoverable gas a compelling target and in that context, we are very excited to commit to the appraisal well. If we proved up the most likely gross resource number, Harvey would be the largest field in our gas portfolio and its economics would be significantly value accretive for IOG. We look forward to providing details on the well plans 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 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.
About ERC Equipoise Limited:
ERCE is an independent consultancy specialising in geoscience evaluation and engineering and economics assessment. Except for the provision of professional services on a time-based fee basis, ERCE has no commercial arrangement with any other person or company involved in the interests which are the subject of this report.
ERCE has the relevant and appropriate qualifications, experience and technical knowledge to appraise the assets professionally and independently. ERCE considers that the scope of the CPR is appropriate and includes and discloses all information required to be included therein and was prepared to a standard expected in accordance with the AIM Rules.
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 document. 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.