IOG.L Share News (IOG)

(Sharecast News) - Independent Oil and Gas announced on Friday that the UK Oil & Gas Authority (OGA) has approved its Core Project Phase 1 field development plan, which it called "a major milestone" for itself and its partner CalEnergy Resources UK.
The AIM-traded firm said full contract awards were expected shortly for key work streams underway since the final investment decision, including platform fabrication, pipelay and subsea work, and well management.

It said project execution activities remained on track, and at present there was no impact to schedule from the current Covid-19 coronavirus-related industry and macroeconomic turbulence.

IOG said the safety of staff and contractors was its main concern, with pandemic-related risks being proactively identified and managed.

It said it was working with its suppliers to ensure social distancing was in effect at all relevant sites, to maintain safe project delivery, and it had also further strengthened its focus on cost savings across all activities.

Construction activities were said to be ramping up to deliver the Southwark and Blythe platforms on schedule in the first half of 2021.

The company said the offshore pipelay campaign remained on schedule for the second half of 2020, with necessary applications submitted to regulatory bodies and the line pipe already transported to the UK.

A competitive rig tender for the first phase drilling programme was said to be progressing well, supported by the company's selected well management contractor, with detailed well and completion design work ongoing at the same time.

The acquisition and testing of two unused, refurbished subsea trees and wellheads had been successfully completed.

IOG also said detailed engineering and planning was ongoing for the refurbishment of the Thames Reception Facilities (TRF) at Bacton, with initial works expected to start in the second quarter, despite access restrictions due to Covid-19.

Further seismic reprocessing work was underway to improve the subsurface imaging of Vulcan Satellites, Goddard and Abbeydale.

Technical work was also continuing on the 40 billion cubic feet equivalent Harvey and 100 billion cubic feet equivalent Redwell structures, to support plans for high-return potential incremental developments.

The company had completed 32nd round licence application interviews with the OGA, with those results now expected by the early summer, as several other nearby growth opportunities remained under evaluation.

"We are very pleased to have received this milestone approval for our core UK gas project," said chief executive officer Andrew Hockey.

"Such government endorsement brings a welcome boost to the UK offshore industry and supply chain given the current environment.

"This innovative low-carbon project, re-using previously decommissioned infrastructure to develop otherwise stranded domestic gas resources, is a definitive example of 'maximising economic recovery', in line with UK government strategy."

Hockey said that in the current "turbulent and unpredictable" environment, the firm was focussed on leveraging its strengths, being its funded status, proven resource base, infrastructure ownership, its "excellent" partner, low unit costs, low carbon footprint and experienced team with a clear value creation strategy.

"The safety of our staff, suppliers and their families remains our top priority and we have continually reviewed and upgraded our procedures to ensure they reflect government guidance and maintain safe working environments.

"As phase 1 execution ramps up, we have avoided any schedule impact to date from Covid-19 and are also targeting cost savings even more proactively to help deliver our project on time and budget."

At 1400 BST, shares in Independent Oil & Gas were down 3.36% at 11.5p.