IOG.L Regulatory News (IOG)

29 December 2021

IOG plc

Southwark drilling update

IOG plc ("IOG", or "the Company"), (AIM: IOG.L), the Net Zero UK gas and infrastructure operator focused on high return projects, provides an update on Southwark drilling operations.

The first Southwark development well was expected to spud by the weekend of 18-19 December, following the repair of the Noble Hans Deul rig. Having initially anticipated a minor delay, owing to repeated technical issues with the underwater Remotely Operated Vehicle (ROV), it has not yet been possible to safely spud the well. A fully functioning ROV is required for surveying the rig's spud cans (leg footings) and ensuring the rig is correctly aligned, as an essential prerequisite for drilling to proceed. A second, higher specification ROV, together with spares and additional personnel, has been mobilised to the rig but has as yet been unable to complete the necessary surveys owing to further technical issues. Repair operations are underway to rectify both units and an alternative vessel-based solution is being put in place should it be required. It is currently expected that the well will be spudded in the coming days and the Company reiterates its guidance for Southwark first gas in mid-2022.

Andrew Hockey, CEO of IOG, commented: 

"After the extensive efforts to get the rig successfully repaired and remobilised to Southwark, it is very frustrating to have not yet spudded the first Southwark development well. However, as always, safety is paramount and we are actively pursuing alternative solutions with the relevant contractors. With spud now expected in the coming days, Southwark first gas remains planned for mid-2022."

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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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