Acquisition of Skipper Discovery

RNS Number : 0818P

Independent Oil & Gas PLC

03 June 2015

 

3 June 2015

Independent Oil and Gas plc

Acquisition of Skipper Discovery

Independent Oil and Gas plc ("IOG"), (AIM: IOG.L), the North Sea focused oil and gas company, is pleased to announce that it has today signed a Sale and Purchase Agreement to acquire the 50% of licence P1609 containing the Skipper discovery from Alpha Petroleum Resources Ltd.  This transaction will result in IOG's independently verified 2C resources increasing by 13.1 MMBbls.  Upon completion of the acquisition, IOG will become Operator and will own 100% of the licence.  The acquisition is subject to confirmation of funding and regulatory approvals.

IOG is currently in discussions with the Department of Energy and Climate Change ("DECC") and the Oil & Gas Authority ("OGA") regarding assuming operatorship of licence P1609.  Their approval is subject to confirmation of IOG's Technical and Environmental Competence.

The initial work programme to drill the commitment well on the licence mid-2016 has been proposed and is subject to a licence extension, which currently expires on 30 September 2015.  The OGA will consider any request, subject to confirmation of funding for the well and a rig contract.  IOG is in advanced discussions with a party relating to a rig contract for the initial well and anticipated subsequent development wells on Skipper.

IOG continues to make good progress with regard to securing longer term funding to appraise and develop its assets through to production, which would include 100% of Skipper.  A Letter of Intent has been signed with an internationally listed group with a multi-billion dollar market capitalisation relating to the funding which is anticipated to complete by mid-August.  It should be noted that the funding is subject to negotiation and the approval of various counterparties and IOG and that there can be no guarantee that IOG will secure such financing.

Mark Routh, CEO of IOG said:

"We have been working hard to secure full ownership of this highly attractive licence and to secure the necessary funding.  We are delighted to be making positive progress on both fronts and look forward to updating shareholders on our financing in the near future."

-ENDS-

Enquiries:

Independent Oil and Gas plc Mark Routh (CEO) Peter Young (CFO)	[phone]
finnCap Ltd Matt Goode/Christopher Raggett (Corporate Finance)	[phone]
Camarco Billy Clegg / Georgia Mann	[phone]

Notes

About Independent Oil and Gas:

IOG is an oil and gas company with established assets focused on the UK North Sea.  The company's strategy is to deliver near term development and production assets in North West Europe, through its extensive technical and commercial expertise, whilst maintaining some exposure to exploration upside.  The company is looking to grow both organically and through acquisition.  After the completion of the Skipper acquisition from Alpha Petroleum Resources Ltd. ("Alpha") and the previously announced Cronx acquisition, the combined estimate of 2P reserves and 2C resources net to IOG will be 38.6 million barrels of oil equivalent ("MMBoe").

Post completion of the Cronx acquisition IOG will have five licences in the North Sea.  Four of these licences will now be owned 100% by IOG and subject to DECC/OGA approval will be operated by IOG.  The Blythe licence is co-owned 50% with Alpha which is the operator.  IOG has a 100% working interest in two other licences, one awarded in the 27^th licensing round and another in the recent 28^th licensing round.  One is to the east of Blythe containing the Truman prospect and Harvey discovery and the other is between the Blythe and Cronx licences which contains the Elgood and Hambleton discoveries and the Tetley and Rebellion prospects.  Both these 100% owned licences have potential resources that could be tied back to nearby infrastructure or to the Blythe development.

Further information can be found on www.independentoilandgas.com

About Blythe:

The Blythe gas discovery straddles Blocks 48/22b and 48/23a in the Southern North Sea in licence P1736 which is 50% co-owned by IOG and Alpha (operator).  Blythe needs no further appraisal and has independently verified gross 2P reserves of 34.3 BCF (6.1 MMBoe) which is 17.2 BCF (3.0 MMBoe) net to IOG.  (Source: ERC Equipoise Competent Person's Report ("CPR") dated September 2013.)

The partnership is working towards submitting a Field Development Plan for Blythe by September 2015.

About Skipper:

The Skipper oil discovery is in Block 9/21a in the Northern North Sea in licence P1609.  Skipper needs further appraisal by drilling a well to retrieve core and oil samples in order to design the optimum field development plan for the field.  IOG can now progress to the appraisal and development stage of this asset.  Skipper has independently verified gross 2C resources of 26.2 MMBbls.  The appraisal well will also target two exploration prospects directly beneath the Skipper oil discovery which may contain oil in place of 46 MMBbls.  (Source: AGR Tracs CPR dated September 2013.)

About Cronx:

IOG has agreed to acquire 100% of Cronx (Block 48/22a, licence P1737) which is subject to completion.  The Cronx gas discovery is 14km north-west of the Blythe field in which IOG owns 50%.  Cronx was discovered in 2007 by well 48/22b-6 drilled by Perenco UK Ltd.

IOG commissioned an independent CPR by ERC Equipoise on Cronx in July 2012 which shows a base case expected gas recovery of 17.6 BCF or 3.4 MMBOE 2C resource.  IOG anticipates drilling a well in 2016, subject to rig availability, the necessary permits and funding.  IOG expects the well to confirm the recoverable resources, which IOG believes has the potential to be larger than the 17.6 BCF base case in the CPR.  IOG is currently evaluating options for the development and export of the Cronx gas.

About Elgood and Hambleton:

The Elgood discovery (IOG 100%) (Block 48/22c, licence P2260) was drilled by Enterprise Oil in 1991 and tested gas to surface at 17.6 MMcfd but was not progressed by Enterprise due to size and gas prices at that time.  IOG's estimate of the recoverable reserves in Elgood is 2.1 MMBoe.

The Hambleton discovery, to the south of the same licence, was drilled by Century Exploration in 2005 but also was not progressed to development.  IOG estimates that Hambleton has recoverable resources of 6 BCF (1 MMBoe).  IOG believes that the reprocessing of existing 3D seismic data could increase recoverable resources up to 26 BCF.

There are prospective resources on licence P2260 of 5.3 MMBoe in the Tetley and Rebellion prospects.  Reprocessing of existing 3D seismic across 48/22a and 48/22c is required to determine whether Elgood connects to Cronx which would boost recoverable reserves significantly.  The new seismic interpretation will also determine the likely size of Hambleton.  IOG is now working on the potential development plans and will commission a CPR‎ to confirm the resources over this area.

Competent Person's Statement:

In accordance with the AIM Note for Mining and Oil and Gas Companies, IOG discloses that Mark Routh, IOG's CEO and Interim Executive Chairman is the qualified person that has reviewed the technical information contained in this announcement.  Mark Routh has an MSc in Petroleum Engineering and has been a member of the Society of Petroleum Engineers since 1985.  He has 35 years' operating experience in the upstream oil and gas industry.  Mark Routh consents to the inclusion of the information in the form and context in which it appears.

 

END

 

 

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