IOG plc, the Net Zero UK gas and infrastructure operator focused on high return projects, provides a preliminary update on Phase 1 production and progress with the resumption of Southwark drilling.
Blythe & Elgood Fields
The Blythe and Elgood fields are produced via the normally unmanned Blythe platform which is connected via a 12" line to the main 24" Saturn Banks Pipeline System that feeds into the associated Saturn Banks Reception Facilities at Bacton terminal.
Since Blythe and Elgood were brought onstream on 13 and 15 March respectively, reservoir performance has been within range of the Company's expectations based on the data from the initial clean-up flow tests from 2021. Over the past week, the Elgood well has flowed continuously at a stable rate in excess of 50 mmscf/d. Blythe has also flowed at rates in excess of 40 mmscf/d. These initial indications are not intended as production guidance. As previously indicated, the Company intends to analyse reservoir and facilities performance data over the initial months of production to inform an annual production guidance range.
As is normal in the start-up phase of an offshore project, some initial mechanical issues have caused interruptions to early production. The Company has made allowances for facilities downtime periods in its internal planning and financial forecasts.
Currently, a chemical injection fault has necessitated the Blythe well to be temporarily shut in. The solution is planned to be implemented this week, enabling Blythe to resume production immediately thereafter. This issue is not affecting Elgood production which has continued in the meantime.
The rock dumping required to provide a stable seabed for the return of the Noble Hans Deul jack-up drilling rig is expected to be completed today. Consequently, return of the rig to the Southwark field location is targeted for next week with a view to a safe resumption of drilling by mid-April. First Gas from Southwark is now expected to be in Q4 2022. Given the nature of the seabed scour issue, contractually the costs associated with the delay since early January will fall predominantly on the licence holders (IOG and its 50:50 joint venture partner CalEnergy Resources (UK) Limited). Whilst these additional shared costs are not covered under the standard insurance packages in place, they are expected to be covered by available cash resources.
Andrew Hockey, CEO of IOG, commented:
"Early reservoir performance indicates flow rates at Blythe and Elgood are in a similar range to the clean-up flow tests, which is encouraging. Elgood is producing steadily at over 50 mmscf/d. We have experienced some early mechanical issues on the Blythe platform, as may be expected during the start-up phase. We expect to resolve a chemical injection issue on the platform this week so that we can establish stable flow from both wells. In parallel, we are pleased to continue our progress towards a safe resumption of drilling at Southwark by mid-April."