MOU with AGR

RNS Number : 8430S

Independent Oil & Gas PLC

29 September 2014

 



29 September 2014

Independent Oil and Gas plc

MOU with AGR to provide Well Construction & Well Project Management Services

Independent Oil and Gas plc ("IOG"), (AIM:IOG.L), the North Sea focused Oil and Gas Company, is pleased to announce that it has entered into a Memorandum of Understanding (MOU) with AGR to work together to deliver Well Construction & Well Project Management in respect of IOG's forthcoming drilling activity.

AGR has already begun discussions on behalf of IOG with several rig owners with regards to securing a rig for Summer 2015.  There are currently several suitable rigs available and this may assist IOG in securing the best deal possible in due course.

The plan for Cronx is to drill a pilot well to confirm the crest of the reservoir and to retrieve core and gas samples.  This will allow IOG to firm up the 3.4 MMBoe resource estimates and optimise the development.  The well will then be suspended for reuse as a producer, possibly with a horizontal section to be drilled later.  IOG's cost estimate for the well based on current rig rates is £6.25m.

Mark Routh, CEO of IOG said:

"We are delighted to have signed this MOU and with AGR's assistance we look forward to operating next year's proposed drilling programme on Cronx, subject to completing the Cronx acquisition.  We look forward to progressing these plans and also to working with AGR on other assets."

Ian Burdis, EVP UK and Africa said:

"We are delighted to have been granted the opportunity to work alongside IOG to deliver the proposed Cronx well and potentially other projects safely and efficiently.  At AGR, we strive to add value to our client's projects and with experience gathered from over 500 drilling projects globally we are well positioned to do just that."

-ENDS-

Enquiries:

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

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.

Post completion of the Cronx acquisition IOG will have five licences in the North Sea:  The Blythe and Skipper licences are co-owned 50% with Alpha Petroleum Resources (formerly ATP Oil and Gas UK Ltd).  IOG has a 100% working interest in two other licences awarded in the 27^th licensing round.  One is to the west of and adjacent to Skipper, which contains the Theakston and Moorhouse prospects and the other is to the east of Blythe containing the Truman prospect and Harvey discovery.  Both these 100% owned licences have potential resources that could be tied back to developments at Skipper and Blythe respectively.  The Blythe owners are preparing for the submission of the Blythe Field Development Plan.

Further information can be found on www.independentoilandgas.com.

About AGR:

AGR delivers well, rig access, HSEQ, reservoir and field management services to the upstream oil and gas industry. The company also offers consultancy manpower, expert software solutions and tailored training. The company has managed over 500 well projects and delivered more than 1,000 reservoir studies in major basins and reservoir types. AGR has offices in Norway, Australia, CIS, UAE, UK and the USA.

Further information can be found on www.agr.com 

About Cronx:

The Cronx acquisition (IOG 100%) is subject to completion.  The Cronx gas discovery is 14km north-west of the Blythe field in which IOG holds 50%.  Cronx was discovered in 2007 by well 48/22b-6 drilled by Perenco UK Ltd.

IOG commissioned an independent Competent Person's Report (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 pilot well in 2015, subject to rig availability, the necessary permits and funding, which IOG currently estimates to be £6.25m.  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.  The well would be reused and extended into a producing well as part of the field development.  IOG is currently evaluating options for the development and export of the Cronx gas.

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 Petroleum Resources Ltd (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 dated September 2013.)

The partnership is working towards submitting a Field Development Plan for Blythe as soon as possible.  IOG is targeting first gas from the Blythe field in mid-2016 but the final development schedule has yet to be formalised.

About Skipper:

The Skipper oil discovery is in Blocks 9/21a in the Northern North Sea in licence P1609 which is 50% co-owned by IOG and Alpha Petroleum Resources Ltd (operator).  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.  Skipper has independently verified gross 2C resources of 26.2 MMBbls which is 13.1 MMBbls net to IOG.  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 Competent Person's Report dated September 2013.)

 

END

 

 

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