Award of Phase 1 Platform EPCI Contract to HSM

RNS Number : 8510U

Independent Oil & Gas PLC

03 August 2020

 

3 August 2020

Independent Oil and Gas plc

Award of Phase 1 Platform EPCI Contract to HSM

Independent Oil and Gas plc ("IOG" or "the Company"), (AIM: IOG.L), the development and production company focused on becoming a substantial UK gas producer , as operator of its joint venture with CalEnergy Resources (UK) Ltd, is pleased to announce that it has awarded the Engineering, Procurement, Construction and Installation (EPCI) contract for its Core Project Phase 1 platforms to Dutch contractor HSM Offshore BV ("HSM"). An accompanying presentation of recent platform fabrication progress is available at: https://www.iog.co.uk/investors/results-reports-and-presentations .

The contract, which is almost entirely lump-sum in nature, comprises the design, engineering, fabrication and installation (including assistance to hook-up and commission) of both normally unmanned installation (NUI) production platforms for the IOG-operated Southwark and Blythe gas fields in the UK Southern North Sea (SNS).

Phase 1 comprises the development and production of the Southwark, Blythe and Elgood gas fields through a total of five production wells with gas transported onshore to Bacton via the 24-inch Thames Pipeline. The Southwark Hub platform will be a key installation both for Phase 1 and other planned developments. The Blythe platform will be the focal point of the Blythe Hub which includes the Elgood subsea tie-back.

Following a competitive selection process, IOG has been working with HSM since late 2019 under pre-contractual arrangements to ensure that platform design and fabrication activities continue on schedule at the yard at Schiedam in the Netherlands. Fabrication activities are progressing well, as announced separately, and offshore installation is planned for 1H 2021.

Andrew Hockey, CEO of IOG, commented:  

"We are delighted to be working with HSM for the fabrication and installation of the Southwark and Blythe production platforms and are pleased to release an accompanying presentation showing recent fabrication progress at the yard. HSM are a highly respected offshore infrastructure fabricator with an extensive history of building platforms for both the Dutch and UK sectors of the North Sea and we are encouraged by the progress they have made to date, particularly in light of the challenges posed by Covid-19. These low carbon footprint facilities at Southwark and Blythe will be key infrastructure for the safe and effective execution of our gas hub strategy, not only for our SNS Core Project assets but also to enable valuable add-on developments."

Jaco Lemmerzaal, Managing Director of HSM, said:

"HSM is very pleased to be selected as contractor by IOG for the Southwark and Blythe platforms. We are drawing on a wealth of platform engineering and construction experience and are making good progress towards the scheduled delivery date offshore in the first half of 2021. We look forward to continuing a positive relationship with IOG on its journey to become a substantial gas producer in the Southern North Sea."

Certain information communicated in this announcement was, prior to its publication, inside information for the purposes of Article 7 of Regulation 596/2014.

Enquiries:

Independent Oil and Gas plc Andrew Hockey (CEO) Rupert Newall (CFO) James Chance (Head of Corporate Finance & IR)	[phone]
finnCap Ltd Christopher Raggett Simon Hicks	[phone]
Peel Hunt LLP Richard Crichton David McKeown	[phone]
Vigo Communications Patrick d'Ancona Chris McMahon Simon Woods	[phone]

About IOG:

IOG owns and operates a 50% stake in substantial low risk, high value gas reserves in the UK Southern North Sea. The Company's Core Project targets a gross 2P peak production rate of 140 MMcfe/d (c. 24,000 Boe/d) from gross 2P gas Reserves of 302 Bcfe¹ + 2C gas Contingent Resources of 108 Bcfe², via an efficient hub strategy. In addition to the independently verified 2P reserves at Blythe, Elgood, Southwark, Nailsworth and Elland and 2C Contingent Resources at Goddard, IOG also has independently verified best estimate gross unrisked prospective gas resources of 73 Bcfe² at Goddard. Alongside this IOG has management estimated mid-case recoverable gas volumes of 40 Bcfe and 100 Bcfe at the Harvey and Redwell licences and continues to pursue value accretive acquisitions to generate significant shareholder returns.

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

² ERC Equipoise Competent Persons Report: October 2018

 

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