REG - IOG PLC - Operational Update

IogAnnouncement

29/03/2022 07:00

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RNS Number : 3111G  IOG PLC  29 March 2022

29 March 2022

 

IOG plc

 

Operational Update

 

IOG plc ("IOG", or "the Company"), (AIM: IOG.L), the Net Zero UK gas and
infrastructure operator focused on high return projects, provides a
preliminary update on Phase 1 production and progress with the resumption of
Southwark drilling.

 

Blythe & Elgood Fields

 

The Blythe and Elgood fields are produced via the normally unmanned Blythe
platform which is connected via a 12" line to the main 24" Saturn Banks
Pipeline System that feeds into the associated Saturn Banks Reception
Facilities at Bacton terminal.

 

Since Blythe and Elgood were brought onstream on 13 and 15 March respectively,
reservoir performance has been within range of the Company's expectations
based on the data from the initial clean-up flow tests from 2021. Over the
past week, the Elgood well has flowed continuously at a stable rate in excess
of 50 mmscf/d. Blythe has also flowed at rates in excess of 40 mmscf/d. These
initial indications are not intended as production guidance. As previously
indicated, the Company intends to analyse reservoir and facilities performance
data over the initial months of production to inform an annual production
guidance range.

 

As is normal in the start-up phase of an offshore project, some initial
mechanical issues have caused interruptions to early production. The Company
has made allowances for facilities downtime periods in its internal planning
and financial forecasts.

 

Currently, a chemical injection fault has necessitated the Blythe well to be
temporarily shut in. The solution is planned to be implemented this week,
enabling Blythe to resume production immediately thereafter. This issue is not
affecting Elgood production which has continued in the meantime.

 

Southwark Field

 

The rock dumping required to provide a stable seabed for the return of the
Noble Hans Deul jack-up drilling rig is expected to be completed today.
Consequently, return of the rig to the Southwark field location is targeted
for next week with a view to a safe resumption of drilling by mid-April. First
Gas from Southwark is now expected to be in Q4 2022. Given the nature of the
seabed scour issue, contractually the costs associated with the delay since
early January will fall predominantly on the licence holders (IOG and its
50:50 joint venture partner CalEnergy Resources (UK) Limited). Whilst these
additional shared costs are not covered under the standard insurance packages
in place, they are expected to be covered by available cash resources.

 

Andrew Hockey, CEO of IOG, commented:

 

"Early reservoir performance indicates flow rates at Blythe and Elgood are in
a similar range to the clean-up flow tests, which is encouraging. Elgood is
producing steadily at over 50 mmscf/d. We have experienced some early
mechanical issues on the Blythe platform, as may be expected during the
start-up phase. We expect to resolve a chemical injection issue on the
platform this week so that we can establish stable flow from both wells. In
parallel, we are pleased to continue our progress towards a safe resumption of
drilling at Southwark by mid-April."

 

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

 Andrew Hockey (CEO)

 Rupert Newall (CFO)

 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 / Oliver Clark

About IOG:

 

IOG is a Net Zero UK gas and infrastructure operator focused on high-return
projects. The Company's operations are currently concentrated around its
offshore and onshore Saturn Banks infrastructure in the UK Southern North Sea.
Phase 1 of its Saturn Banks Project, which started production in March 2022,
entails the commercialisation of the Blythe, Elgood and Southwark gas fields
through this infrastructure. Phase 2 of the Saturn Banks Project entails the
Nailsworth, Goddard and Elland gas discoveries, which are subject to future
investment decisions and expected to be commercialised through the same export
infrastructure. The Company also holds further licences with additional assets
including the Abbeydale, Panther and Grafton gas discoveries, the Kelham
North, Kelham Central, Thornbridge and Thornbridge Deep prospects, and part of
the Orrell gas discovery. Currently, all IOG's licences are held 50:50 with
its joint venture partner CalEnergy Resources (UK) Limited and operated by
IOG. In addition, the Company continually evaluates further opportunities for
accretive portfolio additions to help generate additional shareholder returns.
Further details are available at www.iog.co.uk (http://www.iog.co.uk) .

 

 

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