TIDMIOG
RNS Number : 6046H
Independent Oil & Gas PLC
19 August 2016
19 August 2016
Independent Oil and Gas plc
Completion of the Skipper Appraisal Well
Independent Oil and Gas plc ("IOG" or the "Company"), the
development and production focused Oil and Gas Company, is pleased
to announce the completion of its first operated appraisal well on
the Skipper oil discovery which lies in Block 9/21a in licence
P1609 in the Northern North Sea, of which IOG is 100% owner and
operator.
The well was successfully drilled to a total vertical depth of
5,578ft with no safety incidents and achieved its primary objective
of retrieving good quality reservoir condition oil samples from the
Skipper reservoir in order to optimise the Skipper field
development plan. The oil viscosity of the samples appears likely
to be within the 50cP - 150cP range expected by the IOG management,
much better than Competent Persons Report ("CPR") estimates. The
samples are now being analysed in Aberdeen, with initial results
expected in September 2016. Should these properties be confirmed
the development of the Skipper field will require fewer development
wells thereby improving the development economics.
The well's secondary objective, to drill two mapped reservoir
structures beneath the Skipper oil field in the Lower Dornoch and
Maureen formations is now complete. The well did not encounter
hydrocarbons in these horizons and will now be plugged and
abandoned. The initial licence commitment on P1609 is to drill a
well into the Maureen formation to a minimum depth of 1,700m
(5,578ft). This commitment has therefore now been fulfilled.
Mark Routh, CEO of IOG commented:
"We are extremely pleased to have achieved drilling success at
the Skipper well, our first operated well. We are encouraged by the
good quality oil samples retrieved, the well's primary objective.
Initial observations strongly suggest we have a better oil
viscosity than the CPR estimates. Whilst the exploration prospects
did not encounter hydrocarbons, I am increasingly confident that
the commerciality of the Skipper field has been confirmed now that
we have the data we need to progress to the field development
planning."
"I am very grateful for the support we have received from all of
the contractors involved in our Skipper project. We look forward to
working with them during the Skipper development phase."
-ENDS-
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
Enquiries:
Independent Oil and Gas plc
Mark Routh (CEO) +44 (0) 20 3206
Peter Young (CFO) 1565
finnCap Ltd
Matt Goode/Christopher Raggett +44 (0) 20 7220
(Corporate Finance) 0500
Camarco +44 (0) 20 3757
Billy Clegg / Georgia Mann 4980
Notes
About Independent Oil and Gas:
IOG is an oil and gas company with established assets in 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. Following the Blythe
acquisition, the Company's combined estimate of 2P reserves in
Blythe and 2C resources in Skipper net to IOG are 40.2 MMBoe.
Upon completion of the Cronx acquisition IOG will have five
licences in the North Sea. All of these licences will be owned 100%
and operated by IOG.
Further information can be found on
www.independentoilandgas.com
About Blythe:
The Blythe gas discovery in the Rotliegendes Leman formation
straddles Blocks 48/22b and 48/23a in the Southern North Sea in
licence P1736. The Blythe Leman needs no further appraisal and has
independently verified 2P reserves of 34.3 BCF (6.1 MMBoe).
(Source: ERC Equipoise Competent Person's Report ("CPR") dated
September 2013.)
Gas tested to surface from three separate intervals in the
Carboniferous beneath the Blythe Leman gas discovery from one of
the Blythe discovery wells, 48/23-3 drilled by Arco in 1987. The
maximum rate achieved was 0.9 MMcfd from an unstimulated vertical
test. (Source: End of well report 48/23-3 - November 1987.) This
was deemed uncommercial at the time, before the advent of
horizontal multi-fracture stimulated wells. Further technical work
including seismic reprocessing and remapping needs to be completed
to evaluate this potential resource to refine the gas-in-place
estimates which are between 70 BCF and 310 BCF. (Source: Tullow Oil
48/23a Relinquishment Report - May 2009.)
Oil has flowed to surface from the naturally fractured Zechstein
Carbonates in the Hauptdolomit formation above the Blythe Leman gas
discovery from two wells. Well 48/22-1 drilled by Burmah in 1966
flowed 39deg API oil at rates up to 2,000 barrels per day (Source:
Composite well log 48/22-1 - October 1966) and well 48/23-3 drilled
by Arco in 1987 at flowed 38deg API oil at a maximum rate of 1,128
barrels of oil a day. (Source: End of well report 48/23-3 -
November 1987.) The extent of the structure and potential oil
resources in the Hauptdolomit remains unknown. Previous estimates
considered that the mapped closure was probably small. Oil-in-place
has been estimated between 2 MMBbls and 4 MMBbls. (Source: Tullow
Oil 48/23a Relinquishment Report - May 2009.) Further evaluation
and re-mapping is now warranted now that a development will proceed
on the main Blythe gas discovery.
About Skipper:
The Skipper oil discovery is in Block 9/21a in the Northern
North Sea in licence P1609. IOG owns 100% of the Skipper licence
P1609 and is the Operator. In August 2016 the Company successfully
drilled its first operated appraisal well and retrieved good
quality oil samples, which are currently undergoing testing, in
order to design the optimum field development plan. Initial results
of the samples are due in September 2016. Skipper has independently
verified gross 2C resources of 26.2 MMBbls. IOG management
estimates that the recoverable oil from Skipper is 34.1 MMBbls
based on a recovery factor of 25%, compared to the historic CPR
estimate of 19%. (Source: AGR Tracs CPR dated September 2013.)
Successful flow tests from nearby heavy oil fields substantiate the
company's estimate of a 25% recovery factor. Recovery factor
estimates will be revised during the full field reservoir
simulation studies which will follow receipt of the oil analysis
results.
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. 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 Truman and Harvey:
IOG has a 100% working interest in a licence awarded in the 27th
licensing round to the east of Blythe containing the Truman
prospect and Harvey discovery. IOG estimates potential resources in
this licence of 16 BCF or 3.1 MMBoe. These 100%-owned fields have
potential resources that could be tied back to nearby
infrastructure being developed for the Blythe development.
About Elgood and Hambleton:
IOG has a 100% working interest in a licence awarded in the 28th
licensing round to the west of Blythe containing the Elgood
discovery (Block 48/22c, licence P2260). Elgood 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 and
reinterpretation of existing 3D seismic across 48/22a and 48/22c is
ongoing 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 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 over 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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