Independent Oil and Gas plc Corporate and Operational Progress One Year on from FID
Wednesday 4 November 2020
Independent Oil and Gas plc ("IOG" or "the Company"), (AIM: IOG.L), the UK gas company targeting high returns via an infrastructure-led hub strategy, is pleased to update on the substantial progress in the year since Final Investment Decision (FID) on Phase 1 of its Core Project in the UK Southern North Sea (SNS).
Highlights
- Team significantly strengthened in 2020 to deliver successive phases of growth
- Phase 1 development on schedule for First Gas in Q3 2021
- Blythe and Elgood pipelay campaign ongoing, expected to complete later this month
- Rig signed on attractive terms with extension options, with first well to spud in Q1 2021
- Platform fabrication and Thames Reception refurbishment works continue to progress
- Programme of 1200km² SNS 3D seismic reprocessing nearing completion
- JV partnership continuing to function effectively
- Adapting to increased Covid-19 restrictions while seeking to minimise disruption
Core Project Phase 1
Platforms
· Fabrication of the Phase 1 Southwark and Blythe platforms at HSM's yard in Schiedam continues on track for mechanical completion in Q1 2021 and installation in Q2 2021
· Southwark and Blythe deck stacking and internal fit-out is progressing and both jackets are also well underway
· Covid-19 restrictions have been strengthened at the yard given the increased risks over recent weeks, but work to date has not been interrupted
SURF
· Pipelay campaign for the 6-inch Elgood and Blythe 12-inch lines connecting to the Blythe platform and 24-inch Thames Pipeline respectively is expected to complete later in November
· This follows extensive preparatory work at IOG's pipeline routes and at crossing points for other lines, as per regulatory requirements, and line pipe welding and spooling onshore at Subsea 7's Leith base
· Weather conditions during the campaign to date have been relatively unsettled, resulting in some challenging conditions offshore
· Other required subsea tie-in equipment and the Elgood umbilical are being fabricated or available for installation
Drilling
· Contract signed with Noble Corporation for the Noble Hans Deul jack-up rig to drill the five Phase 1 wells, with options for up to two further wells on favourable terms
· Detailed well design and permitting on track to complete ahead of spudding of first well in Q1 2021
· Other key drilling services, logistics and tangibles also being contracted in parallel
· Petrofac approved as Phase 1 Well Operator by the Oil and Gas Authority (OGA)
Onshore
· Refurbishment works progressing on the Thames Reception Facilities (TRF) at Bacton Gas Terminal (BGT)
· Working closely with terminal operator Perenco to maximise efficiency of TRF recommissioning and minimise requirement for new equipment
· Clean-out and inspection of TRF slug catchers completed to pave the way for re-use
· Key tie-in activities to be undertaken during the scheduled BGT shutdown this quarter
· Competitive gas sales tender process to be concluded during first half of 2021
Portfolio and Business Development
The programme of 3D seismic reprocessing to Pre-Stack Depth Migration (PSDM) on the Company's portfolio is getting closer to completion, with an aggregate area of over 1200km² covered. Interpretation of this new data will materially enhance subsurface understanding of the Company's assets, helping to optimise field developments and inform well designs. An initial update on this work is anticipated before year end.
In the recent 32nd Licensing Round the Company enjoyed another 100% success rate, being offered every block for which it applied. Most notably this includes two new operated gas discoveries, Panther and Grafton, which lie adjacent to the existing portfolio, as 50% operator in partnership with CER (50% non-operator). These discoveries have management estimated 46 Bcfe and 35 Bcfe mid-case recoverable gas resources respectively. Upon acceptance, formal licence awards will follow in due course.
Andrew Hockey, CEO of IOG, commented:
"I am proud of our extensive progress on many fronts since we completed the farm-out to our partner CalEnergy Resources and took FID this time last year. Whilst recognising the challenges of Covid-19, I am equally excited about the year ahead with the transition to production and cash flow from Q3 2021. With a greatly strengthened team working hard to deliver Phase 1 while progressing plans for our pre-development asset portfolio, we are laying the foundations to deliver sustained value to shareholders.
The ongoing technical re-evaluation of the full IOG portfolio by our in-house subsurface team - who have extensive SNS experience - will underpin our wider growth ambitions, enabling further value creation via incremental investments, additional licensing and other potential nearby redevelopments and acquisitions."