Gulf Oil and Gas accountACCOUNT

Independent Oil and Gas Announces SNS Core Project Upgrade

Source: 1/8/2019, Location: Europe

Independent Oil and Gas, a development and production company focused on becoming a substantial UK gas producer, has provided an upgrade on its core development project (the 'Core Project') in the UK Southern North Sea ('SNS').

Andrew Hockey, CEO of IOG commented: The integration into our Core Project of 108 BCF 2C Contingent Resources at the newly awarded Goddard discovery makes what was already a very strong investment case even more compelling; our fully-owned and operated Southern North Sea gas development project now carries a base case IRR of 40% and post-tax NPV of over £350m. The award of Goddard to IOG in the highly competitive 30th licensing round was a big win for us – we consider it one of the most valuable remaining undeveloped UK SNS fields and an ideal fit for our portfolio, lifting our Core Project’s projected peak production rate as high as 146 MMCF/d (c.25 kBoe/d). We assess the main part of the Goddard structure to be technically ready for development and with 108 BCF 2C Contingent Resources it will be the largest field in our Core Project, which can now deliver a total of over 400 BCF of gas into the UK market.

At the outset of 2019, our focus is to deliver funding for Phase 1 of our Core Project thereby reaching FID at the earliest opportunity. We are technically and commercially prepared for project execution having made a head start on relevant offshore site surveys. In addition, the Core Project does not yet include the potential upside of Harvey, which subject to successful appraisal could add another 129 BCF Best Estimate Prospective Resources. We look forward to providing further updates on Harvey in due course.

Fiona MacAulay, IOG’s Chair, commented: I am delighted to be chairing IOG whose assets, team and strategy are poised to make it a substantial mid-tier UK gas producer delivering excellent returns to shareholders. The addition of the recently licensed Goddard field to the existing Core Project without increase to the overall funding requirement is a great example of the significant value our management team is creating for investors. We have identified a number of additional opportunities to further enhance our Southern North Sea asset base to add to our value and returns. I am looking forward to working ever closer with the team to help unlock this very valuable portfolio in 2019.

SNS project upgrade
The Company’s revised Core Project plan comprises a two-phase development of its 302 BCF of 2P gas reserves at the Blythe Hub and the Vulcan Satellites Hub and 108 BCF² 2C Contingent Resources at Goddard. This delivers a 40% IRR and has a £358m post-tax NPV10 with no additional funding required to develop Goddard. The Core Project now comprises a total of 410 BCF of 2P+2C reserves and resources across six discovered gas fields to be developed in two phases: Phase 1 consists of the Southwark, Blythe and Elgood fields (158 BCF 2P Reserves) and Phase 2 consists of the Goddard, Nailsworth and Elland fields (144 BCF¹ 2P Reserves and 108 BCF 2C Resources).

Phase 1 of the Core Project is technically ready to enter the execution phase with all engineering work required for FID complete. Commercial terms are substantially agreed with all major contractors.

The Goddard licence, which was awarded in the recent 30th round, commenced on 1st October 2018. Goddard’s 108 BCF of 2C Contingent Resources are discovered gas resources which are technically ready for development. Goddard also contains a further 73 BCF Best Estimate Prospective Resources to be appraised at the optimal time.

IOG’s development team is preparing FDP submission for the Goddard 2C discovery to the Oil & Gas Authority during 1H 2019. IOG believes these 2C Resources can be reclassified to 2P Reserves upon FDP submission. ERC Equipoise’s October 2018 Competent Persons Report (CPR) is available on the IOG website and describes the Goddard resource base.

The Company is in the final stages of signing documentation for purchase of the onshore Thames Reception Facility, where its fully-proven, 550 MMCF/d capacity Thames Pipeline lands at Bacton Gas Terminal on the North Norfolk coast. The pipeline will provide a low-cost, safe and efficient export route for IOG’s assets straight to the UK market with future commercialisation opportunities for new asset additions to IOG’s portfolio and for 3rd party gas.

Funding and Harvey
The Company remains ready to progress its funding plans, with a view to achieving FID in Q1 2019, and technically ready to achieve First Gas within 20 months of FID. Further to the 29 November 2018 update regarding the repurposing of the September 2018 loan, the Company is continuing discussions regarding funding of the Harvey appraisal well alongside its wider FID funding process. Detailed commercial and technical preparatory work continues for the Harvey appraisal well. The Core Project with the addition of Harvey would potentially deliver a 77% IRR and a £688m post-tax NPV10 with a peak annual production rate of over 230 MMCF/d.

Development News in United Kingdom >>

Norway >>  5/15/2019 - The plan for development and operation (PDO) of the second phase of the Johan Sverdrup field development was formally approved by Norwegian authoritie...
Mozambique >>  5/14/2019 - Mozambique Rovuma Venture said that the government of Mozambique had approved its development plan for the Rovuma LNG project, which will produce, liq...

Chile >>  5/10/2019 - Abengoa (ABG), the international company that applies innovative technology solutions for sustainability in the infrastructures, energy and water sect...
United Arab Emirates >>  5/7/2019 - His Excellency Dr. Sultan Ahmed Al Jaber, UAE Minister of State and Group CEO of the Abu Dhabi National Oil Company (ADNOC), and Darren W. Woods, Chai...

United Kingdom >>  5/7/2019 - Exceed has successfully secured a two-year contract to support Serica Energy (UK) Limited with its future well operations. ...
United States >>  5/6/2019 - BP has sanctioned development of the Thunder Horse South Expansion Phase 2 project in the deepwater Gulf of Mexico. The project will further boost out...

Related Categories: Camp Building  Cleaning Equipment, Services  Communication  Corrosion Products/Services  Development  Exploration  Food Supplies  General  Labor Services  Land & Leasing  Mine Clearance  Oil & Gas Companies  Production  Service Companies  Skilled Labors  Transportation, 4X4 Trucks  Unskilled Labors  Utility Systems  Waste Disposal  Water Supply Services  Welding Products/Services 

Related Articles: Camp Building  Cleaning Equipment, Services  Communication  Corrosion Products/Services  Development  Exploration  General  Labor Services  Land & Leasing  Mine Clearance  Oil & Gas Companies  Production  Service Companies  Transportation, 4X4 Trucks  Utility Systems  Water Supply Services  Welding Products/Services 

United Kingdom Oil & Gas 1 >>  2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32 |

More News

Related Links

Gulf Oil and Gas
Copyright © Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.