IOG.L Regulatory News (IOG)

14 March 2022

IOG plc

Phase 1 First Gas

IOG plc ("IOG", or "the Company"), (AIM: IOG.L), the Net Zero UK gas and infrastructure operator focused on high return projects, is pleased to confirm First Gas from Phase 1 of its Saturn Banks Project.

IOG has released a new video to mark this milestone: https://youtu.be/kZBzzm01M8g. 

Andrew Hockey, CEO of IOG, commented: 

"I am delighted to confirm that Saturn Banks Phase 1 First Gas has been achieved. Yesterday the Blythe well was safely opened up and IOG gas has started to be delivered into Bacton and on into the UK market. The Elgood well is expected to follow in the next two days.

I am immensely grateful to the whole IOG team for their determined efforts to achieve this major target. My sincere thanks also go to our joint venture partner CalEnergy Resources and their owner Berkshire Hathaway Energy, to all our shareholders and bond investors, as well as to our many contractors, commercial partners and regulators.

Phase 1 First Gas is just the first step on a bigger journey, giving us the operational platform and financial capacity to deliver multiple further phases of growth. By delivering domestic gas supplies through our co-owned infrastructure on a Scope 1 and 2 Net Zero basis we can generate strong and sustainable returns for shareholders."

Fiona MacAulay, Chair of IOG, commented:

"I am hugely proud of everyone in our team for overcoming the many challenges to deliver this historic milestone, going from Final Investment Decision to first production in under two and a half years. Through constructive collaboration, guided by our values of resourcefulness, innovation, drive, efficiency, resilience and safety, we have transformed IOG from an unfunded start-up to a gas producer expected to generate significant cashflow this year and into the future.

With heightened energy security risks across Europe and the continued urgency of the energy transition, there has never been a more important time to bring new UK gas resources onstream. This is especially true of IOG's gas which has far lower carbon intensity than imports."

Alistair Macfarlane, Area Manager - Southern North Sea and East Irish Sea at the Oil and Gas Authority, said:

"As the UK transitions to net zero it will need a stable and secure supply of domestic gas to reduce its reliance on imports, which often have a larger carbon footprint, and so first production from the Saturn Banks project is a positive development."

Phase 1 First Gas

After final commissioning of the Saturn Banks Reception Facilities (SBRF) at Bacton terminal, backgassing of the pipeline system was successfully completed over the past week. This enabled the planned start-up sequence, with Blythe the first well to be opened up and forward flow commencing into the SBRF on Sunday 13 March. The Elgood well is planned to start up in the next two days and an initial view on flow rates will be assessed once stable production has been established from both fields. The Company intends to analyse reservoir performance data over the initial months of production to inform an annual production guidance range.

The entire Saturn Banks offshore system, including the platforms, pipelines, associated subsea equipment and production wells, will be normally unmanned with remote operation from the control room at Bacton terminal, helping to minimise operating costs and carbon intensity over time.

2021 Results

The Company expects to release its Final Audited 2021 Results and a full portfolio technical update on Thursday 17 March.

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.

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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 assets 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.