Trading Statement and COVID-19 Update

RNS Number : 4595H

Igas Energy PLC

25 March 2020

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

25 March 2020

IGas Energy plc (AIM: IGAS)

("IGas" or "the Company")

Trading Statement and COVID-19 Update

IGas is today providing an update on trading, the impact of COVID-19, and the actions it has taken to help guide the business through this period of uncertainty. 

At the present time, operations remain on track and production is currently within the guidance range given in the trading statement of 6 February 2020 of 2,250 - 2,450 boepd, notwithstanding the current, rapidly changing macro environment. Operating costs in sterling terms are also in line. The Company benefits when the dollar is stronger, and at an exchange rate of $1.2:£1, we expect operating costs to average c.$27.5/boe for the year.

As at 1 March 2020, the Group had hedged a total of 340,000 bbls for the remainder of 2020 at an average rate of $53.77/bbl. We have also hedged $9m into sterling at an average rate of $1.17:£1.

Cash balances at 29 February 2020 were £8.1m and net debt was £5.2m.

Given the fall in oil prices we have reviewed our capital expenditure programme for the year and reduced it principally to maintenance capex, abandonment and capital for projects already in execution which in aggregate is anticipated to be c.£6m in 2020.

We continue to keep costs under review across the business in light of oil price and market volatility.

COVID-19

The Coronavirus is a deeply concerning international public health emergency which everyone hopes to see contained quickly. The primary focus is the health and safety of our employees and other stakeholders, and we have acted promptly in that regard.

Currently, all of the Group's operations continue to function effectively.  Of our 148 employees those that are able to work from home have been doing so in a phased way since early March. We have approximately 65% of staff who are in operational roles and have been identified by the Government as key workers. Many of these are "lone" workers who had already been 'identified, trained and equipped' pre-COVID-19 so the pandemic does not represent a significant change to existing procedures or protocols.

In respect of IGas's operational sites, our facilities are designed with operational control provisions that ensure safe and compliant operation within the normal operational envelope and automated shutdown functionality should there be an unexpected excursion outside of these routine conditions. In addition to these local control and shutdown systems, IGas has the ability to monitor the site operations from remote locations utilising its digital systems, which allow efficient intervention by operational and maintenance staff to be coordinated alongside the standard monitoring visits that are conducted by our staff.

Whilst we are reliant on transporting oil to UK refineries, we have significant capacity for managing our production inventory.  All key contractors in terms of transport and refineries are also classified as key workers.

We continue to monitor the situation closely and act within Government guidelines and to that end we are working up a number of contingency plans should our operations be significantly affected by the coronavirus.

However, the inbuilt control systems are able to make any site and well safe without the need for human intervention.  We continue to liaise with all our regulators.

A further announcement regarding our final results will be made once a revised date for publication has been determined in accordance with the FCA and our advisers.

Ross Pearson, Technical Director of IGas Energy plc, and a qualified person as defined in the Guidance Note for Mining, Oil and Gas Companies, March 2006, of the London Stock Exchange, has reviewed and approved the technical information contained in this announcement. Mr Pearson has 19 years oil and gas exploration and production experience.

For further information please contact:

IGas Energy plc	Tel: [phone]
Stephen Bowler, Chief Executive Officer
Julian Tedder, Chief Financial Officer
Ann-marie Wilkinson, Director of Corporate Affairs
Investec Bank plc (NOMAD and Joint Corporate Broker)	Tel: [phone]
Sara Hale/Jeremy Ellis/Tejas Padalkar
BMO Capital Markets (Joint Corporate Broker)	Tel: [phone]
Tom Rider/Neil Elliot/Jeremy Low/Tom Hughes
Canaccord Genuity (Joint Corporate Broker)	Tel: [phone]
Henry Fitzgerald-O'Connor/James Asensio
Vigo Communications	Tel: [phone]
Patrick d'Ancona/Chris McMahon

 

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