Independent Oil and Gas plc, the development and production company focused on becoming a substantial UK gas producer, is pleased to present its unaudited interim results for the six months ended 30 June 2020.
- Core Project Phase 1 development maintaining schedule towards First Gas target of Q3 2021
- Field Development Plan ("FDP") approved by the UK Oil and Gas Authority ("OGA")
- Extensive design, engineering, procurement and fabrication progress achieved on the two Phase 1 normally unmanned platforms for the Southwark and Blythe fields
- Awarded sizeable Engineering, Procurement, Construction and Installation ("EPCI") contract for Subsea, Umbilicals, Risers and Flowlines ("SURF") to Subsea 7 S.A.
- Awarded Phase 1 well management contract to Petrofac, covering planning, execution and close-out of the five Phase 1 wells at the Southwark, Blythe and Elgood fields
- Preparation and procurement processes advanced for refurbishment of the co-owned Thames Reception Facilities ("TRF") at the Bacton Gas Terminal ("BGT")
- 3D Seismic reprocessing projects progressed on Vulcan Satellites area, Harvey-Redwell area, Goddard and Abbeydale, to improve subsurface imaging, update volumetric estimates, inform development plans and optimise well designs
Corporate and Financial Highlights
- Cash balance at period end of £104.1 million (31 December 2019: £98.3 million), including restricted cash of £72.6 million (31 December 2019: £82.0 million)
- Post-tax loss for the period of £3.7 million (30 June 2019: £4.6 million)
- Group net cash1 at period end of £9.2 million (31 December 2019: £8.0 million)
- Further £36.7 million of uncalled development carry available at period end from partner CalEnergy Resources (UK) Ltd ("CER")
- €11.7 million (£10.4 million equivalent) drawn down from senior secured bond ("Bond") escrow account for development expenditure, leaving €66.0 million (£60.2 million equivalent) remaining to be drawn at three further operational milestones
- Addition of key technical, operational and financial personnel to help execute Phase 1 and deliver further stages of corporate growth
Post-Period End Highlights
- Award of substantial EPCI contract with HSM Offshore B.V. ("HSM") for the two Phase 1 normally unmanned platforms at Southwark and Blythe
- Several awards made and orders placed for services and tangibles for the Phase 1 drilling programme due to start in 1H 2021
Expected Future Activity
- Award of jack-up rig contract for the five-well Phase 1 drilling campaign in the coming weeks
- Completion of offshore pipelay campaign for the 12-inch and 6-inch Blythe and Elgood export lines in late Q3 2020
- Outcome of targeted applications made in 32nd Offshore Licensing Round results anticipated to be released by the OGA later in 2020
- Results of 3D seismic reprocessing on Vulcan Satellites area, Harvey-Redwell area, Goddard and Abbeydale from Q4 2020 onwards
- Commencement of Phase 1 drilling programme in 1H 2021, leading to first gas in Q3 2021
Net cash is defined as restricted cash (£72.6 million) plus cash and cash equivalents (£31.6 million) plus financial assets (£1.2 million), less outstanding loans (£96.2 million)
Andrew Hockey, CEO of IOG, said:
"The first half of 2020 was an important period of development progress for IOG, in which we advanced all critical Phase 1 workstreams while navigating the challenges of the Covid-19 pandemic. Besides signing major contracts with leading contractors and consolidating our strong partnership with CalEnergy Resources, we secured clear government endorsement for Phase 1. We also continued to invest in the organisation itself, adding several high-quality new hires to help safely and successfully execute Phase 1 and progress the valuable upside opportunities in our sights. I would like to thank all our staff and contractors for all their hard work and commitment in continuing to deliver our project whilst adapting to these unusual times.
"We are overseeing a rapid transformation in our business with several exciting milestones to come on the path to first gas next year, including the start of development drilling and Southwark and Blythe platform installation. Our extensive technical and portfolio development work aimed at incremental opportunities in the wider Thames Pipeline catchment area should also start to bear fruit. All told, we are taking great strides towards our goal of becoming a valuable UK gas producer. I look forward to updating the market on further progress."