Independent Oil and Gas plc (IOG), the development and production focused Oil and Gas Company, is pleased to announce the results of a Competent Person’s Report (CPR) on the Vulcan Satellites, Blythe and Elgood assets by ERC Equipoise Limited (ERCE) as at 1 October 2017.
Highlights:
- CPR confirms 2P gas Reserves of 303 BCF (54 MMBoe), previously 34 BCF, in IOG’s UK Southern North Sea (SNS) gas portfolio
- 2P Reserves classification applied to all of IOG’s development assets: the Vulcan Satellites, Blythe and Elgood
- Vulcan Satellites 2P Reserves of 248 BCF
- Blythe 2P Reserves of 33 BCF, in line with 2013 CPR
- Elgood 2P Reserves of 22 BCF
- CPR estimates a 2P peak production rate in excess of 200 MMcfd (c. 35,000 Boe/d)
- Significant prospective resources in Harvey to be published in a forthcoming separate CPR
CPR Process:
During 2017, IOG built its own proprietary static geological model based on interpretation of the reprocessed 3D seismic available from multiple surveys across the whole SNS portfolio. This resulted in a robust and consistent estimation of the gas in place volumes in all the Company’s SNS gas assets. This was followed by dynamic reservoir modelling and optimal well design and placement, including hydraulic stimulation modelling for the Vulcan Satellite fields. This in turn enabled the development of production forecasts for each field. ERCE reviewed IOG’s proprietary subsurface work, production forecasts, costs and economic assumptions. ERCE then made its own independent assessment of the recoverable Reserves from the portfolio, the project development and operating costs and the resultant economics.
The CPR presents the economic Reserves and valuation of IOG’s five development fields as at 1 October 2017 using data and information available up to 30 September 2017 and applying the PRMS standard.
Vulcan Satellite Field names:
As part of the field determination process, IOG has formally applied to register the field names for the Vulcan Satellite fields. Subject to the approval of the UK Oil and Gas Authority, Vulcan North West will become Nailsworth, Vulcan East will become Elland and Vulcan South will become Southwark. Nailsworth, Elland and Southwark will still collectively be known as the Vulcan Satellites.
Mark Routh, CEO and Interim Chairman of IOG commented:
We are extremely pleased with the results of the CPR on our SNS development portfolio. IOG now holds independently verified 2P gas Reserves of 303 BCF / 54 MMBoe with a 2P peak production rate of more than 200 MMcfd and a 2P NPV10 valuation of £321 million. This is a major landmark for our portfolio and clear vindication of our strategy of acquiring neglected and stranded assets at low cost, to be commercialised via our gas hub strategy using the Thames Pipeline export route.
In addition to confirming substantial volumes, the classification as reserves is a key step towards securing development funding. Our submission of the Field Development Plan for the Vulcan Satellites hub, expected later this month, will be the next important step in that regard. We also expect to confirm further key project contractors in the coming weeks. In addition, we shortly expect to receive a further CPR on the Harvey structure which provides very material upside to our portfolio.
