Annual General Meeting (“AGM”) Trading Update
IGas today provides the following statement in relation to trading for the period 1 January to 13 May 2019. This update is issued in advance of the Company’s AGM which is being held at 10.30am today.
· Net production averaged 2,398 boepd for the first four months of the year, which is in line with budget. Net production for the year is still anticipated to be c. 2,200 – 2,400 boepd for the full year and operating expenditure of $32.5/boe (assuming an exchange rate of £1:$1.30).
· Conventional 2P reserves of 14.6 MMboe as at 31 December 2018. NPV10 estimate is $220 million at $70/bbl long term Brent crude price; equating to c.140 pence per share (assuming an exchange rate of £1:$1.30 and shares in issue of 122.2 million).1
· We continue to progress projects in our core conventional business which include additional gas monetisation and water injection, some ahead of schedule, and will make further announcements in the coming weeks as they move through final investment decision. We continue to monitor activity in the Weald Basin and are actively seeking sites for appraisal of the Kimmeridge and Portland sandstones.
· Analysis of the Springs Road well data suite is on track and we look forward to announcing key results next month.
· We await the Planning Inspector’s decision on our planning application at Ellesmere Port in Cheshire.
Note 1 Price assumptions based on D&M CPR long term Inflated see pages 28-29 of the report:
Commenting Stephen Bowler, Chief Executive, said:
“We continue to drive the business forward on a number of fronts. Our production business is delivering in line with budget and we are progressing a number of incremental opportunities earlier than anticipated thereby maximising our cash flow from the current higher commodity prices, and demonstrating the benefits of operatorship and flexibility within the portfolio. At these oil prices, the conventional business alone provides significant value for shareholders, with a 2P NPV10 of c.140 pence per share based on long term oil prices of c.$70/bbl inflated and are generating good operating cash flows.
Our exploration projects at Tinker Lane and Springs Road have both been successfully and sensitively completed and provide significant upside to our conventional business. The cores we recovered at Springs Road were of a high quality and we look forward in anticipation to receiving the results next month. The data gathered from both wells to date shows that there are significant prospective resources in our East Midlands acreage and we are now looking at progressing a pilot development in the wider area.
The recent Net Zero report published by the Committee on Climate Change (“CCC”) recognises that, to achieve this aim, the UK will still continue to need significant quantities of natural gas out to 2050 and beyond.”
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 18 years oil and gas exploration and production experience.
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