REG - IOG PLC - Southwark update

IogAnnouncement

18/01/2023 07:00

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RNS Number : 0485N  IOG PLC  18 January 2023

18 January 2023

 

IOG plc

 

Southwark update

 

IOG plc ("IOG", or "the Company"), (AIM: IOG.L), the Net Zero UK gas and
infrastructure operator focused on high-return projects, provides an update on
the Southwark field development:

 

-    The Southwark A2 well has progressed through the hydraulic stimulation
phase and currently remains in the clean-up phase, which has taken longer than
planned

-    Following stimulation of six reservoir zones, gas rates observed from
A2 to date have been lower than expected, with a maximum stabilised rate of
4.2 mmscf/d via coiled tubing, at a flowing wellhead pressure of 456 psi

-     Associated water rates of up to 1,632 bbl/d strongly indicate a
connection to the active aquifer from at least one of the stimulated zones

-    A production logging tool (PLT) is being run to acquire downhole data
that will help to understand the contribution of each zone and inform next
steps

-    Subject to the PLT data, the potential solution would be to isolate
water producing zones to enable gas flow from other zones. Relevant equipment
has already been mobilised to the rig and would be expected to be utilised
over the next week.

-     If isolation is successful, updated well test results would be
expected within the coming weeks which would provide a clearer assessment of
the scope for the A2 well to produce gas at commercial rates

Dougie Scott, COO of IOG, commented:

"Having stimulated six discrete reservoir zones, a low gas rate and apparent
formation water production at this stage of the A2 well clean-up is unexpected
and disappointing. The production logging tool should provide important gas
and liquid flow data to help us calibrate the forward plan, which is likely to
be to isolate water producing zones in order to assist gas flow."

Rupert Newall, CEO of IOG, commented:

"The Southwark A2 well testing and clean-up process has not met our
expectations to date. At this stage, however, the IOG and Petrofac teams
continue to work through the options, gather data, interpret the implications
for field production and evaluate next steps."

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 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
resources 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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