Igas Energy PLC (LON:IGAS) Conventional Project Update

IGas is pleased to announce it is moving to the execution phase for a further waterflood project, at its existing producing field at Welton in the East Midlands.

Following the success of previous Welton waterflood projects the technical team identified an additional opportunity in the south of the Welton Field in the Tupton & Deep Hard Rock Reservoirs. The project involves converting a suspended production well (WC01) to a water injector to increase reservoir sweep and increase field recovery by c.340 Mbbls (2C resource) with a peak incremental production rate of up to 120 bopd. The Company’s estimated mid-case project economics have an IRR of over 100% and a NPV10 of c.£7.0 million.

Commenting Stephen Bowler, Chief Executive, said:

“We continue to mature projects across the portfolio as we seek to maximise returns on our existing operations and infrastructure, and in this case are pleased to be moving forward with another low-risk opportunity with an estimated mid-case IRR of over 100%.

This is part of the wider Welton Full Field Development and as well as increasing production, will aid in de-risking further injection projects into other areas of the field and provide critical infrastructure to assist with water disposal and support future rationalisation work across Welton sites.”

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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