REG - IOG PLC - FY2022 Reserves and Resources Update

IogAnnouncement

03/03/2023 10:00

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RNS Number : 8518R  IOG PLC  03 March 2023

3 March 2023

 

IOG plc

 

FY2022 Reserves and Resources Update

 

IOG plc ("IOG", or "the Company"), (AIM: IOG.L) provides a summary of its
FY2022 annual reserves and resources review. This review involves a technical
reassessment by the Company's subsurface team of all portfolio assets to
generate updated reserves and resources estimates.

 

The update describes management's current assessment of the portfolio and has
been approved by the HSE and Technical Committee and the Board. It follows the
Petroleum Resources Management System (PRMS) classification framework. In the
case of production assets, it is based on static and dynamic models that have
been updated and history matched over field life to date. In the case of
pre-production assets, it is based on interpretations of reprocessed seismic
and well data where applicable.

 

Reserves

 

 Field      Gross billion cubic feet equivalent (BCFE)
                              YE 2021                    2022 Production  YE2
                                                                          022
            1P       2P       3P                1P       2P               3P
 Blythe     25.9     43.3     56.9     4.1      24.6     42.3             46.8
 Elgood     5.7      7.8      7.9      4.1      0.4      2.2              2.8
 Southwark  46.3     71.3     104.8    0.0      0.0      10.0             15.0

Blythe

Blythe FY2022 1P and 2P reserve estimates represent a modest increase on
FY2021 estimates, factoring in 2022 production of 4.1 billion cubic feet
equivalent (BCFE, where condensate is converted into gas equivalent at 5.8
bbl/mcf)

-     1P case assumes production only from the H1 well, as H2 was not
sanctioned at year end

-     2P case assumes production from H1 and H2, which was sanctioned in
February 2023

Elgood

Elgood produced 4.1 BCFE in 2022. Production of the remaining reserves is
expected to require pipeline dewatering and onshore compression.

-     1P case assumes 0.4 BCFE production post-dewatering

-     2P case assumes 0.4 BCFE post dewatering and a further 1.8 BCFE
post-compression

Southwark

As previously stated, Southwark is undergoing further detailed technical
review following the A2 well result, involving external technical expertise.
This will inform the A1 plan and may also result in a further revision of the
estimated reserves range.

Pending that review, the current estimated range reflects the uncertainty
following A2 as to the recoverability of commercial gas volumes from the A1
and A2 wells.

-     1P case assumes no production is possible from the field

-     2P case assumes production from the A1 well only, based on a limited
stimulation scenario, with no production from the A2 well

Reclassified Contingent Resources: Nailsworth and Elland

 Field       Gross BCFE
                          YE 2021            YE2
                                             022
             1P    2P     3P     1C    2C    3C
 Nailsworth  63.9  105.2  155.9  48.5  84.9  140.2
 Elland      39.9  55.0   72.9   39.9  55.0  72.9

 

The Nailsworth and Elland gas fields, which are envisaged to be part of a
Central Hub development in the area north of Southwark, have been reclassified
from the lowest ranked reserve category under PRMS, Justified for Development,
to the highest ranked contingent resource category, Development Pending. This
classification is considered currently more appropriate given the evolution in
development plans from the earlier FDP version that informed the October 2017
Competent Persons Report. Both assets would then be expected to be
reclassified to Reserves Justified for Development upon Final Investment
Decision.

 

In addition, the estimated contingent resources range for Nailsworth has been
updated to 1C / 2C / 3C 48.5 / 84.9 / 140.2 BCFE. This follows a full
subsurface uncertainty analysis which included updates to the static and
dynamic models. The post-A2 detailed technical review of Southwark could also
have implications for the Nailsworth estimated resource range in future. The
volumetric estimates on the Elland gas field have not changed.

Contingent Resources for other assets

 Field      Gross BCFE
                         YE 2021             YE2
                                             022
            1C    2C     3C     1C    2C     3C
 Goddard    52.0  115.0  169.0  52.0  115.0  169.0
 Abbeydale  19.0  23.0   25.0   19.0  23.0   25.0
 Grafton    24.0  35.0   46.0   24.0  35.0   46.0
 Panther    38.0  46.0   55.0   38.0  46.0   55.0

The volumetric estimated range of contingent resources have not changed for
these four gas fields.

Prospective Resources

 

 Prospect             Gross BCFE
                                        YE 2021                 YE20
                                                                22
                      Low   Mid   High  GCoS  Low   Mid   High  GCoS
 Goddard Flank 1      16.0  27.0  42.0  71%   16.0  27.0  42.0  71%
 Goddard Flank 2      30.0  50.0  73.0  71%   30.0  50.0  73.0  71%
 Southsea             13.0  31.0  76.0  48%   13.0  31.0  76.0  48%
 Kelham North         34.0  46.0  58.0  72%   34.0  46.0  58.0  72%
 Kelham Central       11.0  16.0  22.0  72%   11.0  16.0  22.0  72%
 Thornbridge          9.0   15.0  20.0  64%   9.0   15.0  20.0  64%
 Thornbridge Deep     24.0  46.0  76.0  18%   24.0  46.0  76.0  18%
 Orrell (on licence)  12.6  17.6  21.0  100%  11.0  16.0  22.0  100%

 

Of the prospects in the portfolio, only the Orrell structure, which lies
partly within the P2442 licence area, has been slightly revised since the
previous assessment. Subject to further technical assessment and successful
appraisal of the Kelham North and Kelham Central structures, Orrell could
potentially become part of a Southern Hub development. This would be most
likely via a single well subsea tie-back to an unmanned host platform and is
also envisaged to include the Abbeydale discovery which lies south-east of
Kelham North and Kelham Central.

 

As previously noted, IOG also applied in the 33(rd) UK Offshore Licensing
Round with its joint venture partner CalEnergy for nine blocks in five
licences across the Saturn Banks catchment area that all contain existing gas
discoveries.

 

Finally, the reserves and resources estimates contained herein are based on a
current assumed date for the start-up of onshore compression of March 2027.
The work on compression is currently at concept feasibility evaluation stage.

 

Rupert Newall, CEO of IOG, commented:

"This comprehensive and rigorous annual reassessment of all our reserves and
resources is an essential pre-requisite for maximising the value of our
portfolio. It provides the technical baseline for our operational and
investment plans, based on a realistic and balanced subsurface view of each
asset.

This work continues throughout the year and is now informed by nearly a full
year of production data for Blythe and Elgood, recent drilling data for
Southwark, as well as ongoing remapping, reinterpretation and remodelling of
the pre-development discoveries and prospects in the portfolio."

Competent Person's Statement

In accordance with the AIM Note for Mining and Oil and Gas Companies, IOG
discloses that Phil Cox, IOG's Head of Subsurface, is the qualified person
that has reviewed the technical information contained in this document. He
has an MSc in Geology from the Royal Holloway, University of London, is a
fellow of the Geological Society and has over 23 years' of experience in the
upstream oil and gas industry. Phil Cox consents to the inclusion of the
information in the form and context in which it appears.

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the company's obligations under Article 17 of
MAR.

 

Enquiries:

 

 IOG plc                                            +44 (0) 20 7036 1400

 Rupert Newall (CEO)

 Dougie Scott (COO)

 James Chance (Head of Capital Markets & ESG)

 finnCap Ltd                                        +44 (0) 20 7220 0500

 Christopher Raggett / Simon Hicks

 Peel Hunt LLP                                      +44 (0) 20 7418 8900

 Richard Crichton / David McKeown

 Vigo Consulting                                    +44 (0) 20 7390 0230

 Patrick d'Ancona / Finlay Thomson

About IOG:

 

IOG is a UK developer and producer of indigenous offshore gas. The Company
began producing gas in March 2022 via its offshore and onshore Saturn Banks
production infrastructure. In addition to its production assets, IOG operates
several UK Southern North Sea licences containing gas discoveries and
prospects which, subject to future investment decisions, may be commercialised
through the Saturn Banks infrastructure. All its assets are co-owned 50:50
with its joint venture partner CalEnergy Resources (UK) Limited. Further
details of its portfolio can be found at www.iog.co.uk (http://www.iog.co.uk)
.

 

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