TIDMIOG
RNS Number : 3782T
Independent Oil & Gas PLC
12 October 2017
12 October 2017
Independent Oil and Gas plc
CPR Confirms Significant Reserves Upgrade
Independent Oil and Gas plc ("IOG" or the "Company"), the
development and production focused Oil and Gas Company, is pleased
to announce the results of a Competent Person's Report ("CPR") on
the Vulcan Satellites, Blythe and Elgood assets by ERC Equipoise
Limited ("ERCE") as at 1 October 2017.
Highlights:
-- CPR confirms 2P gas Reserves of 303 BCF (54 MMBoe),
previously 34 BCF, in IOG's UK Southern North Sea ("SNS") gas
portfolio
-- 2P Reserves classification applied to all of IOG's
development assets: the Vulcan Satellites, Blythe and Elgood
o Vulcan Satellites 2P Reserves of 248 BCF
o Blythe 2P Reserves of 33 BCF, in line with 2013 CPR
o Elgood 2P Reserves of 22 BCF
-- CPR estimates a 2P peak production rate in excess of 200 MMcfd (c. 35,000 Boe/d)
-- Significant prospective resources in Harvey to be published in a forthcoming separate CPR
CPR Process:
During 2017, IOG built its own proprietary static geological
model based on interpretation of the reprocessed 3D seismic
available from multiple surveys across the whole SNS portfolio.
This resulted in a robust and consistent estimation of the gas in
place volumes in all the Company's SNS gas assets. This was
followed by dynamic reservoir modelling and optimal well design and
placement, including hydraulic stimulation modelling for the Vulcan
Satellite fields. This in turn enabled the development of
production forecasts for each field. ERCE reviewed IOG's
proprietary subsurface work, production forecasts, costs and
economic assumptions. ERCE then made its own independent assessment
of the recoverable Reserves from the portfolio, the project
development and operating costs and the resultant economics as
summarised below.
The CPR presents the economic Reserves and valuation of IOG's
five development fields as at 1 October 2017 using data and
information available up to 30 September 2017 and applying the PRMS
standard. The table below shows the CPR estimates of Reserves and
Net Present Values, both undiscounted and discounted at 10%
("NPV(10) ") for IOG's 100% interests in the fields.
Vulcan Satellites, Blythe
and Elgood 1P 2P 3P
------------------------------------------------ ---- ---- ------
Economic Gas Reserves (BCF) 201 303 435
------------------------------- --------------- ---- ---- ------
Oil Equivalent Reserves
(incl. condensate) (MMBoe) 36 54 77
------------------------------- --------------- ---- ---- ------
Post-Tax NPV(10) (incl.
IOG's tax losses) (GBP million) 97 321 584
------------------------------- --------------- ---- ---- ------
Pre-Tax NPV(10) (GBP million) 119 453 880
------------------------------- --------------- ---- ---- ------
Pre-Tax NPV(0) (undiscounted) (GBP million) 295 843 1,530
------------------------------- --------------- ---- ---- ------
A copy of the CPR executive summary is available on the IOG
website: -
http://www.independentoilandgas.com/thirdpartyreports.html
Vulcan Satellite Field names:
As part of the field determination process, IOG has formally
applied to register the field names for the Vulcan Satellite
fields. Subject to the approval of the UK Oil and Gas Authority,
Vulcan North West will become Nailsworth, Vulcan East will become
Elland and Vulcan South will become Southwark. Nailsworth, Elland
and Southwark will still collectively be known as the Vulcan
Satellites.
Mark Routh, CEO and Interim Chairman of IOG commented:
"We are extremely pleased with the results of the CPR on our SNS
development portfolio. IOG now holds independently verified 2P gas
Reserves of 303 BCF / 54 MMBoe with a 2P peak production rate of
more than 200 MMcfd and a 2P NPV(10) valuation of GBP321 million.
This is a major landmark for our portfolio and clear vindication of
our strategy of acquiring neglected and stranded assets at low
cost, to be commercialised via our gas hub strategy using the
Thames Pipeline export route.
In addition to confirming substantial volumes, the
classification as reserves is a key step towards securing
development funding. Our submission of the Field Development Plan
for the Vulcan Satellites hub, expected later this month, will be
the next important step in that regard. We also expect to confirm
further key project contractors in the coming weeks.
In addition, we shortly expect to receive a further CPR on the
Harvey structure which provides very material upside to our
portfolio."
-S-
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 3879
James Chance (CFO) 0510
finnCap Ltd
Christopher Raggett / Anthony
Adams +44 (0) 20 7220
(Corporate Finance) 0500
Camarco +44 (0) 20 3757
Georgia Edmonds / Tom Huddart 4980
Glossary
"1P" the Proved Reserves;
"2P" the sum of Proved plus Probable Reserves;
"3P" the sum of Proved plus Probable plus
Possible Reserves;
"BCF" or billion (10(9) ) standard cubic feet;
"bscf"
"Boe" barrels of oil equivalent. One barrel
of oil is approximately the energy
equivalent of 5,800 standard cubic
feet of natural gas;
"Boe/d" Barrels of oil equivalent per day;
"MMBoe" millions (10(6) ) of barrels of oil
equivalent;
"MMcfd" millions (10(6) ) of standard cubic
or "MMscfd" feet per day;
"Proved those quantities of petroleum which,
Reserves" by analysis of geological and engineering
data, can be estimated with reasonable
certainty to be commercially recoverable,
from a given date forward, from known
reservoirs and under current economic
conditions, operating methods and
government regulations. Proved reserves
can be categorised as developed or
undeveloped. If deterministic methods
are used, the term reasonable certainty
is intended to express a high degree
of confidence that the quantities
will be recovered. If probabilistic
methods are used, there should be
at least a 90% probability that the
quantities actually recovered will
equal or exceed the estimate;
"Probable those unproved reserves which analysis
Reserves" of geological and engineering data
suggests are more likely than not
to be recoverable. In this context,
when probabilistic methods are used,
there should be at least a 50% probability
that the quantities actually recovered
will equal or exceed the sum of estimated
Proved plus Probable reserves;
"Possible those additional reserves which analysis
Reserves" of geological and engineering data
suggests are less likely to be recoverable
than Probable Reserves. In this context,
when probabilistic methods are used,
there should be at least a 10% probability
that the quantities actually recovered
will equal or exceed the sum of estimated
Proved plus Probable plus Possible
reserves;
"PRMS" The SPE/WPC/AAPG/SPEE Petroleum Resources
Management System for Reserves and
Resources Classification;
"Reserves" those quantities of hydrocarbons which
are anticipated to be commercially
recovered from known accumulations;
"standard standard cubic feet measured at 14.7
cubic feet" pounds per square inch and 60 degrees
or "scf" Fahrenheit
Notes
About Independent Oil and Gas:
IOG owns substantial low risk, high value gas Reserves in the UK
Southern North Sea. The Company is targeting a 2P peak production
rate in excess of 200 MMcfd (c. 35,000 Boe/d) from its substantial
current portfolio via an efficient hub strategy. Alongside this it
continues to pursue value accretive acquisitions, to generate
significant shareholder returns. All of IOG's licences are owned
100% and operated by IOG.
About ERC Equipoise Limited:
ERCE is an independent consultancy specialising in geoscience
evaluation and engineering and economics assessment. Except for the
provision of professional services on a time-based fee basis, ERCE
has no commercial arrangement with any other person or company
involved in the interests which are the subject of this report.
ERCE has the relevant and appropriate qualifications, experience
and technical knowledge to appraise the assets professionally and
independently. ERCE considers that the scope of the CPR is
appropriate and includes and discloses all information required to
be included therein and was prepared to a standard expected in
accordance with the AIM Rules.
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 document. 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.
Further information can be found on
www.independentoilandgas.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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