IOG.L Regulatory News (IOG)

11 October 2021

IOG plc

Update on Southwark drilling operations

IOG plc ("IOG", or "the Company"), (AIM: IOG.L), the Net Zero UK gas and infrastructure operator focused on high return projects, provides a drilling update on the Southwark field, the third of its Phase 1 fields after Elgood and Blythe.

Over recent days the Noble Hans Deul jack-up drilling rig mobilised to Southwark following completion of the Blythe production well. Early on Sunday 10 October, during routine jacking operations after arriving at the field, an issue was identified on one of the legs of the rig and the installation process was halted. No drilling or associated works were ongoing at the time. The rig went to full muster while the issue was assessed and all 66 people on board are safe and well. There was no damage to the rig hull or to the Southwark platform.

The rig is stable and connected to tow boats while the crew assesses its condition. The priority of IOG and its drilling contractors remains the safety of all relevant personnel, ensuring the rig's ongoing integrity and the safe and efficient continuation of the Phase 1 drilling campaign at the earliest feasible time.

Noble Corporation, the rig owner, has initiated an investigation into the cause of the issue. It is initially expected that the rig will be transported to port to undertake any necessary assessments before drilling can be safely resumed. The Company will release further relevant information as it becomes available.

As per the recent Blythe drilling update, the Company continues to expect First Gas from both the Blythe and Elgood fields in Q4 2021 once the final subsea and onshore installations are complete.

Andrew Hockey, CEO of IOG, commented: 

"Needless to say, we will be taking all necessary actions to minimise the interruption to safe and efficient development drilling at Southwark caused by this unexpected issue identified by the Noble Hans Deul rig during jacking operations. Most importantly, there has been no harm to any personnel or any IOG assets. In the meantime, this has no bearing on the timing of Phase 1 First Gas from the Blythe and Elgood fields which remains on schedule to occur during Q4 2021."

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, and 21 Bcfe at Harvey. 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.

In December 2020 IOG was also awarded 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