Independent Oil and Gas plc (AIM: IOG.L), the development and production focused oil and gas company, is pleased to announce its results for the Year Ended 31 December 2018.
· Completion of the transformational acquisition of 100% operated ownership of the Thames Pipeline (‘PL370’) and the demonstration of its viability to provide a stable export route for the Company’s 100% owned gas assets straight to the UK market and National Transport System (‘NTS’).
o Offshore site and route survey along PL370, all proposed platform locations and intra-field connecting pipelines completed in May 2018;
o Completion of the Intelligent Pigging Programme (‘IPP’) confirmed excellent condition of the PL370 infrastructure; and
o Completion of tethered pig inspection together with 150-bar pressure hydrotest confirms PL370 economic life good for the next two decades and condition ‘as new’ confirmed by analysis undertaken by Oilfield Testing Services.
· Significant operational progress towards delivering IOG’s SNS gas hub strategy.
o Environmental Impact Assessment (‘EIA’) submitted for the Blythe Hub in January 2018 and the Vulcan Satellites Hub in April 2018;
o Platform fabrication Front End Engineering and Design (‘FEED’) undertaken by the Heerema Fabrication Group; and
o FEED completed by Wood for the Subsea, Umbilicals, Risers and Flowlines (‘SURF’) scope of work on the Phase 1 development
· Strengthened portfolio around PL370 with the award of 100% ownership of three new licence areas, during the UKCS 30th Licensing Round acquiring Goddard, Harvey SE and Abbeydale. Goddard adds 108 BCF of independently assessed 2C Contingent Resources of gas and 73 BCF Best Case Prospective Gas Resources at Goddard.
· Core Project comprises Blythe and Vulcan Satellites Hub with Goddard 2C Contingent Resources.
· 3D seismic reprocessing over the Harvey structure completed and re-interpreted leading to revised management estimate of Best-Case Prospective Resources of 129 BCF.
o Harvey appraisal well planned to spud in 2019, with the potential to significantly increase the Company’s resource base.
· Additional £10 million convertible loan facility signed with London Oil & Gas Limited (‘LOG’) on 21 February 2018, with a further £15 million loan (not convertible) secured from LOG on 13 September 2018. As at 31 December 2018, £7.85 million remains undrawn on the £15 million facility. A further £3.925 million was drawn in January 2019 and £3.925 million outstanding remains.
· Cash balance at period end of £0.70 million.
· Post tax loss for the year was £5.64 million.
· Continue to progress funding process for Final Investment Decision (‘FID’) on Phase 1 of the core development, including debt and equity discussions as well as an announced farm-out process to bring in an industrial partner.
· FID targeted for 1H 2019, with first gas targeted at the start of Q1 2021.
· Progress ongoing farm-out discussions on Core Project, with decision expected in 1H 2019 between industrial or capital markets funding to FID and development and SNS portfolio
· Drill appraisal well at Harvey, expected to spud in mid-2019
· Progress work on a field development plan for the Goddard gas field
· Continue to develop and expand the asset base via license applications and M&A activity
· Post period end, on 1 April 2019 the Company announced a conditional Fundraising comprising a Placing to raise £16.6 million, a Subscription to raise £0.325 million and an Open Offer to raise up to approximately £2 million
Andrew Hockey, CEO of IOG, said:
“I’m pleased to report that 2018 was a year of progress across our SNS portfolio. We continued to advance development plans for our Core Project and wider SNS portfolio. The purchase of the Thames Pipeline in April 2018 and its subsequent recommissioning has also been key to unlocking the value of our SNS portfolio, providing us with a secure, low-cost export route to bring our gas onshore at the Bacton Terminal.
“Looking forward, two key catalysts to value growth should come to fruition in 2019. We look forward to concluding our Core Project development discussions and expect to be in a position to select our preferred party to deliver either a farm-in or capital markets solution to reach FID on the Core Project in 1H 2019. The second near term value catalyst is the high-impact Harvey appraisal well which could significantly enhance the value of our SNS development. In addition to this we [expect to submit / will continue to progress] our Field Development Plan for Goddard which will add significant incremental value to our Core Project.”
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