REG - IOG PLC - Update on gas sales arrangements

IogAnnouncement

01/03/2022 18:00

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RNS Number : 2820D  IOG PLC  01 March 2022

1 March 2022

 

IOG plc

 

Update on gas sales arrangements

 

IOG plc ("IOG", or "the Company"), (AIM: IOG.L), the Net Zero UK gas and
infrastructure operator focused on high return projects, makes the following
statement regarding the gas sales agreement ("GSA") entered into in 2021 with
Gazprom Marketing & Trading Limited ("GM&T").

 

In July 2021, following a competitive offtake process involving more than 10
bidders, the Company, via its subsidiaries IOG North Sea Limited ("IOGNSL")
and IOG UK Ltd ("IOGUKL"), signed a GSA with GM&T for its equity
production from the Elgood and Southwark fields up to October 2023. GM&T
is based in London and has been involved in the UK gas market for over two
decades.

 

Elgood and Southwark, along with the Blythe field, collectively form Phase 1
of the IOG-operated Saturn Banks Project. The Company has a separate gas sales
agreement in place with BP Gas Marketing Limited for Blythe gas.

 

The Company has, via IOGNSL and IOGUKL, served notices on GM&T with
immediate effect. The Elgood and Southwark equity gas is now expected to be
sold to an alternative buyer.

 

Andrew Hockey, CEO of IOG, commented:

 

"Our thoughts are with everyone affected by the shocking, unprovoked invasion
of Ukraine. In that context, IOG has today served notices to GM&T with
immediate effect.

 

We had strong interest in rights to buy IOG gas during the competitive offtake
process we ran last year and would expect to sell the gas to a highly credible
alternative buyer. We already have a separate sales agreement in place with BP
Gas Marketing Ltd for the Blythe field."

 

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 / Chris McMahon / Oliver Clark

About IOG:

 

IOG's Saturn Banks Project targets a gross peak production rate of 140 mmscf/d
(c. 24,000 Boe/d) from gross 2P gas reserves of 302 Bcfe¹ and management
estimated 2C gas Contingent Resources of 132 Bcfe, via an efficient hub
strategy based on co-owned infrastructure. In addition to its 2P reserves at
Blythe, Elgood, Southwark, Nailsworth and Elland and 2C contingent resources
at Goddard, it has management estimated gross 2C contingent resources of 23
Bcfe at Abbeydale and gross unrisked mid-case prospective resources of 36 Bcfe
at Kelham North, 42 Bcfe at Kelham Central, 58 Bcfe at Thornbridge, 31 Bcfe at
Southsea, 28 Bcfe and 19 Bcfe in the two Goddard flank structures. The Orrell
discovery, with management estimated gross 2C contingent resources of 42 Bcfe,
also lies approximately 50% on the P2442 licence held 50% by IOG. IOG also
holds a 50% operated stake in Licence P2589, containing the Panther and
Grafton gas discoveries with management estimated gross mid-case contingent
resources of 46 Bcfe and 35 Bcfe respectively. In addition, IOG continues to
pursue value accretive acquisitions to help generate further significant
shareholder returns.

¹ERC Equipoise Competent Persons Report: October 2017, adjusted by Management
to account for updated project timing and compression

 

 

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