2 Feb 2018 07:00
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
2 February 2018
IGas Energy plc (AIM: IGAS)
("IGas" or "the Company")
Operational and Trading Update
IGas provides a trading and operational update for the year to 31 December 2017. Final results for the year ended 31 December 2017 will be announced on Wednesday, 21 March 2018. The information contained in this statement has not been audited and may be subject to change.
Financial Highlights
· Net production averaged 2,335 boepd for the year and for December 2017 the average rate was c. 2,400 boepd (net). Operating costs for the year were c$28.5/boe. We anticipate net production of between 2,300 - 2,400 boepd in 2018.
· 2P conventional reserves replacement of over 100% (31 Dec 2017: Net 2P reserves 13.64 MMboe)1.
· Cash balances as at 31 December 2017 of £15.8 million and net debt of £6.1 million.
· Carried work programme of up to $240 million as at 31 December 2017, at year end exchange rate of $1.35.
· 600,000 barrels hedged for 2018 using three-way zero cost collars with an average floor price protection of $47/bbl and an average call spread of $60/bbl - $75/bbl.
Operational Highlights
· Site construction is ongoing at our sites in North Nottinghamshire, Springs Road and Tinker Lane. It is the Company's intention to drill the Springs Road well first. We expect to spud Springs Road mid-2018.
· In the North West, we were granted environmental permits for our Ellesmere Port site in November 2017 and on 17 January 2018, the Planning Officer at Chester West and Chester Council made a recommendation for the approval of our application. At the planning committee meeting on 25 January 2018, the committee voted to refuse the application. We are currently considering our options, including our right to bring forward an appeal.
· Also in the North West, at Ince Marshes, we continue to progress our planning application to drill a new well and hydraulically fracture at this existing site.
· Our gas monetisation project at Albury in Surrey is progressing well, with a public consultation event held on 18 January 2018. We anticipate first gas from Albury in the second half of 2018, subject to planning consent.
Notes
1. Company estimates
Stephen Bowler, CEO, commented:
"We ended the year positively with average production and production costs for the year better than expectations, whilst also replacing reserves by over 100% on a 2P basis. With Brent pricing currently at around US$70 per barrel, we are generating free cash flow in our conventional business and continue to evaluate additional projects with attractive economics.
2018 is going to be an exciting year for the onshore industry. Cuadrilla recently announced that early results from its vertical wells in Lancashire were very encouraging and they are confident that there is a very sizeable quantity of natural gas in the Bowland Shale. A number of wells are being drilled or tested by operators across multiple basins, including at our two sites in Nottinghamshire, which will help us better understand the significant hydrocarbon opportunity below our feet."
John Blaymires, Chief Operating Officer of IGas Energy plc, and a qualified person as defined in the Guidance Note for Mining, Oil and Gas Companies, March 2006, of the London Stock Exchange, has reviewed and approved the technical information contained in this announcement. Mr. Blaymires has 35 years oil and gas exploration and production experience.
For further information please contact:
IGas Energy plc
Tel: +44 (0)20 7993 9899
Stephen Bowler, Chief Executive Officer
Julian Tedder, Chief Financial Officer
Ann-marie Wilkinson, Director of Corporate Affairs
Investec Bank plc (NOMAD and Joint Corporate Broker)
Tel: +44 (0)20 7597 5970
Sara Hale/Jeremy Ellis/George Price
Canaccord Genuity (Joint Corporate Broker)
Tel: +44 (0)20 7523 8000
Henry Fitzgerald-O'Connor
Vigo Communications
Tel: +44 (0)20 7830 9700
Patrick d'Ancona/Chris McMahon