REG - IOG PLC - Operational & Corporate Update

IogAnnouncement

13/09/2023 07:15

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RNS Number : 2345M  IOG PLC  13 September 2023

13 September 2023

 

IOG plc

 

Operational & Corporate Update

 

IOG plc ("IOG", or "the Company"), (AIM: IOG.L) provides an operational and
corporate update.

 

 

Operations

·      Blythe H2 well Operating Efficiency was 96.9% in August 2023
(2023 YTD: 94.4%)

·      H2 gas rate declined from 27.7 mmscf/d to 21.2 mmscf/d over the
month

o  No formation water production

o  Initial production data indicates connected gas volumes in line with
expectations

·     One-week planned Bacton terminal shutdown successfully completed
in early August, resulting in:

o  Production Efficiency for the month of 77.5% (2023 YTD: 82.4%)

o  Average gross realised gas rate of 17.8 mmscf/d (2023 YTD: 15.7 mmscf/d)

·     Average realised gas price for August 2023 was 85.1 p/therm (2023
YTD: 107.5 p/therm)

·    Planning underway for a Blythe H1 production trial to assess a
sustainable gas rate and associated water rate, with a view to potential
low-cost production enhancement

 

Portfolio

·    Portfolio pre-development work continues to focus primarily on
conventional discovered gas opportunities in the Southern and Central Clusters

·   The North Sea Transition Authority (NSTA) has informed the JV that it
is not minded to extend the Nailsworth P2342 and P130 licences beyond their
current expiry dates

o As such, these licences will expire on 30 September 2023 and 31 December
2023 respectively, with no impact on IOG's net 2P reserves

o  This is likely to impact the commercial potential of licence P039 (Elland)

o Nailsworth and Elland are both unconventional (tight gas) fields which have
been undergoing technical re-evaluation following the Southwark A2 well

 

Corporate

·    Active bondholder discussions on near-term liquidity and longer-term
capital structure solutions continue under the current bond waiver which
remains in place up to 29 September 2023

·     Cash balance at 31 August 2023 of £14.5m, of which £7.3m is
restricted

 

Change of Name of Nominated Adviser and Broker

 

The Company also announces that its Nominated Adviser and joint Broker has
changed its name to Cavendish Capital Markets Limited following completion of
its own corporate merger.

 

Rupert Newall, CEO, commented:

 

"August saw stable production at the Blythe H2 well, with 97% Operating
Efficiency and the Bacton shutdown works successfully completed early in the
month. However, with H2 production seeing natural decline and realised
day-ahead gas prices remaining far below last year's levels, the Company's
financial position remains challenging. We continue to engage actively with
bondholders and their advisors on this under the current waiver to 29
September and will update on further progress as appropriate.

 

With the gas winter starting next month, the team are working on options to
maximise production while managing costs, including a production trial on the
Blythe H1 well. Whilst we are now primarily focused on conventional assets, we
have been informed that our request to extend the unconventional Nailsworth
licences will not be approved, which is also likely to impact the
commerciality of Elland."

 

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                                            info@iog.co.uk (mailto:info@iog.co.uk)

 Rupert Newall (CEO)

 James Chance (Head of Capital Markets & ESG)

 Cavendish Capital Markets Limited

 Christopher Raggett / Simon Hicks

 Peel Hunt LLP

 Richard Crichton / David McKeown

 Vigo Consulting                                    iog@vigoconsulting.com (mailto:iog@vigoconsulting.com)

 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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