Update on gas sales arrangements

RNS Number : 2820D

IOG PLC

01 March 2022

 

1 March 2022

IOG plc

Update on gas sales arrangements

IOG plc ("IOG", or "the Company"), (AIM: IOG.L), the Net Zero UK gas and infrastructure operator focused on high return projects, makes the following statement regarding the gas sales agreement ("GSA") entered into in 2021 with Gazprom Marketing & Trading Limited ("GM&T").

In July 2021, following a competitive offtake process involving more than 10 bidders, the Company, via its subsidiaries IOG North Sea Limited ("IOGNSL") and IOG UK Ltd ("IOGUKL"), signed a GSA with GM&T for its equity production from the Elgood and Southwark fields up to October 2023. GM&T is based in London and has been involved in the UK gas market for over two decades.

Elgood and Southwark, along with the Blythe field, collectively form Phase 1 of the IOG-operated Saturn Banks Project. The Company has a separate gas sales agreement in place with BP Gas Marketing Limited for Blythe gas.

The Company has, via IOGNSL and IOGUKL, served notices on GM&T with immediate effect. The Elgood and Southwark equity gas is now expected to be sold to an alternative buyer.

Andrew Hockey, CEO of IOG, commented:  

"Our thoughts are with everyone affected by the shocking, unprovoked invasion of Ukraine. In that context, IOG has today served notices to GM&T with immediate effect. 

We had strong interest in rights to buy IOG gas during the competitive offtake process we ran last year and would expect to sell the gas to a highly credible alternative buyer. We already have a separate sales agreement in place with BP Gas Marketing Ltd for the Blythe field."

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR.

Enquiries:

IOG plc Andrew Hockey (CEO) Rupert Newall (CFO) James Chance (Head of Capital Markets & ESG)	[phone]
finnCap Ltd Christopher Raggett / Simon Hicks	[phone]
Peel Hunt LLP Richard Crichton / David McKeown	[phone]
Vigo Consulting Patrick d'Ancona / Chris McMahon / Oliver Clark	[phone]

About IOG:

IOG's Saturn Banks Project targets a gross peak production rate of 140 mmscf/d (c. 24,000 Boe/d) from gross 2P gas reserves of 302 Bcfe¹ and management estimated 2C gas Contingent Resources of 132 Bcfe, via an efficient hub strategy based on co-owned infrastructure. In addition to its 2P reserves at Blythe, Elgood, Southwark, Nailsworth and Elland and 2C contingent resources at Goddard, it has management estimated gross 2C contingent resources of 23 Bcfe at Abbeydale and gross unrisked mid-case prospective resources of 36 Bcfe at Kelham North, 42 Bcfe at Kelham Central, 58 Bcfe at Thornbridge, 31 Bcfe at Southsea, 28 Bcfe and 19 Bcfe in the two Goddard flank structures. The Orrell discovery, with management estimated gross 2C contingent resources of 42 Bcfe, also lies approximately 50% on the P2442 licence held 50% by IOG. IOG also holds a 50% operated stake in Licence P2589, containing the Panther and Grafton gas discoveries with management estimated gross mid-case contingent resources of 46 Bcfe and 35 Bcfe respectively. In addition, IOG continues to pursue value accretive acquisitions to help generate further significant shareholder returns.

¹ ERC Equipoise Competent Persons Report: October 2017, adjusted by Management to account for updated project timing and compression

 

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