Independent Oil and Gas (IOG) chief executive, Mark Routh, said the firm was “vindicated” after a new report boosted the firm’s reserves potential in the Southern North Sea.
ERC Equipoise produced a Competent Person’s Report (CPR) on the IOG’s Vulcan Satellites, Blythe and Elgood assets.
The CPR confirmed 2P gas Reserves of 303 billion cubic feet (BCF) or 54 million barrels of oil equivalent (MMBoe), previously 34 BCF, in IOG’s UK Southern North Sea (SNS) gas portfolio.
CPR estimates a 2P peak production rate in excess of 200 MMcfd, which equates to 35,000 Boe/d.
Mr Routh said: “We are extremely pleased with the results of the CPR on our SNS development portfolio. IOG now holds independently verified 2P gas Reserves of 303 BCF / 54 MMBoe with a 2P peak production rate of more than 200 MMcfd and a 2P NPV10 valuation of £321million.
“This is a major landmark for our portfolio and clear vindication of our strategy of acquiring neglected and stranded assets at low cost, to be commercialised via our gas hub strategy using the Thames Pipeline export route.
“In addition to confirming substantial volumes, the classification as reserves is a key step towards securing development funding. Our submission of the Field Development Plan for the Vulcan Satellites hub, expected later this month, will be the next important step in that regard. We also expect to confirm further key project contractors in the coming weeks.
“In addition, we shortly expect to receive a further CPR on the Harvey structure which provides very material upside to our portfolio.”
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Vulcan Satellites, Blythe and Elgood
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|
1P
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2P
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3P
|
|
Economic Gas Reserves
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(BCF)
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201
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303
|
435
|
|
Oil Equivalent Reserves (incl. condensate)
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(MMBoe)
|
36
|
54
|
77
|
|
Post-Tax NPV10 (incl. IOG’s tax losses)
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(£ million)
|
97
|
321
|
584
|
|
Pre-Tax NPV10
|
(£ million)
|
119
|
453
|
880
|
|
Pre-Tax NPV0 (undiscounted)
|
(£ million)
|
295
|
843
|
1,530
|
IOG owns a 100% interest in the fields.
As part of the field determination process, IOG has formally applied to register the field names for the Vulcan Satellite fields.
Subject to the approval of the UK Oil and Gas Authority, Vulcan North West will become Nailsworth, Vulcan East will become Elland and Vulcan South will become Southwark. Nailsworth, Elland and Southwark will still collectively be known as the Vulcan Satellites.
The firm will confirm key contractors in the coming weeks.
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