TIDMIOG
RNS Number : 2720L
Independent Oil & Gas PLC
30 September 2016
30 September 2016
Independent Oil and Gas plc
Initial Skipper Appraisal Well Results
Independent Oil and Gas plc ("IOG" or the "Company"), the
development and production focused Oil and Gas Company, announces
the initial results from its first operated appraisal well on the
Skipper oil discovery which lies in Block 9/21a in licence P1609 in
the Northern North Sea, of which IOG is 100% owner and
operator.
Highlights:
-- Although the oil is moving in the reservoir, the first sample
results indicate that the oil is approximately 11deg API and has a
significantly higher viscosity than expected.
-- These measurements do not align with our observations and
therefore the remaining samples need to be reviewed and tested.
Next steps will then be Reservoir modelling to consider potential
development options. Determining commerciality may therefore take
several months.
-- The quality of the sands, although not cored, suggest
permeabilities in excess of 10 Darcies, significantly better than
previously assumed.
-- As the crest of the Skipper reservoir in the appraisal well
was found to be 44ft shallower than prognosed, management's
estimate of the most likely oil in place has increased from 136.5
million barrels ("MMBbls") to 142.6 MMBbls.
Mark Routh, CEO of IOG commented:
"The analysis of the oil retrieved from the appraisal well
indicates that Skipper is a heavy oil discovery with similar
gravity to other nearby heavy oil fields. We have observed that the
oil moves in the reservoir and is mobile at surface at ambient
conditions. The initial oil analysis results are incompatible with
our observations, therefore we are now reviewing our strategy to
establish the commerciality of Skipper. In addition, we have an
increased oil in place, higher observed reservoir permeabilities
and an increased reservoir height from the crest to the oil water
contact.
"Drilling our first well as operator was a very important step
for IOG and we now have an excellent portfolio of assets,
comprising of one-third oil and two-thirds gas. This is subject to
completion of the Vulcan Satellite fields acquisition, which is
expected in short order.
Well Results
The Skipper appraisal well was successfully drilled to a total
vertical depth of 5,578ft in August 2016, with no safety incidents
and achieved its primary objective of retrieving oil samples from
the Skipper reservoir in order to optimise the Skipper field
development plan.
The crest of the Skipper reservoir in the appraisal well was
found to be 44ft shallower than prognosed. As a result,
management's estimate of the most likely oil in place has increased
from 136.5 million barrels ("MMBbls") in the 2013 Competent Persons
Report to 142.6 MMBbls. An increased distance between the crest of
the reservoir and the Oil Water Contact in any development will
improve the likely oil recovery by delaying the onset of water
breakthrough.
The quality of the sands, although not cored, suggested
permeabilities in excess of 10 Darcies, which is significantly
better than previously assumed.
The initial licence commitment on P1609, to drill a well into
the Maureen formation to a minimum depth of 1,700m (5,578ft) has
now been fulfilled and the licence will now proceed into the second
term.
-S-
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
Enquiries:
Independent Oil and Gas plc
Mark Routh (CEO) +44 (0) 20 3206
Peter Young (CFO) 1565
finnCap Ltd
Matt Goode/Christopher Raggett +44 (0) 20 7220
(Corporate Finance) 0500
Camarco +44 (0) 20 3757
Billy Clegg / Georgia Mann 4980
Notes
About Independent Oil and Gas:
IOG is an oil and gas company with established assets in the UK
North Sea. The company's strategy is to deliver near term
development and production assets in North West Europe, through its
extensive technical and commercial expertise, whilst maintaining
some exposure to exploration upside. The company is looking to grow
both organically and through acquisition. Following the Blythe
acquisition, the Company's combined estimate of 2P reserves in
Blythe and 2C resources in Skipper net to IOG are 40.2 MMBoe.
Upon completion of the Cronx acquisition IOG will have five
licences in the North Sea. All of these licences will be owned 100%
and operated by IOG.
Further information can be found on
www.independentoilandgas.com
About Blythe:
The Blythe gas discovery in the Rotliegendes Leman formation
straddles Blocks 48/22b and 48/23a in the Southern North Sea in
licence P1736. The Blythe Leman reservoir needs no further
appraisal and has independently verified 2P reserves of 34.3 BCF
(6.1 MMBoe). (Source: ERC Equipoise Competent Person's Report
("CPR") dated September 2013.)
Gas tested to surface from three separate intervals in the
Carboniferous beneath the Blythe Leman gas discovery from one of
the Blythe discovery wells, 48/23-3 drilled by Arco in 1987. The
maximum rate achieved was 0.9 MMcfd from an unstimulated vertical
test. (Source: End of well report 48/23-3 - November 1987.) This
was deemed uncommercial at the time, before the advent of
horizontal multi-fracture stimulated wells. Further technical work
including seismic reprocessing and remapping needs to be completed
to evaluate this potential resource to refine the gas-in-place
estimates which are between 70 BCF and 310 BCF. (Source: Tullow Oil
48/23a Relinquishment Report - May 2009.)
Oil has flowed to surface from the naturally fractured Zechstein
Carbonates in the Hauptdolomit formation above the Blythe Leman gas
discovery from two wells. Well 48/22-1 drilled by Burmah in 1966
flowed 39deg API oil at rates up to 2,000 barrels per day (Source:
Composite well log 48/22-1 - October 1966) and well 48/23-3 drilled
by Arco in 1987 at flowed 38deg API oil at a maximum rate of 1,128
barrels of oil a day. (Source: End of well report 48/23-3 -
November 1987.) The extent of the structure and potential oil
resources in the Hauptdolomit remains unknown. Previous estimates
considered that the mapped closure was probably small. Oil-in-place
has been estimated between 2 MMBbls and 4 MMBbls. (Source: Tullow
Oil 48/23a Relinquishment Report - May 2009.) Further evaluation
and re-mapping is now underway now that a development will proceed
on the main Blythe gas discovery.
About Skipper:
The Skipper oil discovery is in Block 9/21a in the Northern
North Sea in licence P1609. IOG owns 100% of the Skipper licence
P1609 and is the Operator. In July/August 2016 the Company
successfully drilled its first operated appraisal well and
retrieved oil samples, in order to design the optimum field
development plan. Skipper has independently verified gross 2C
resources of 26.2 MMBbls. Following the results from the appraisal
well, IOG management's estimates of the oil in place in the Skipper
reservoir are minimum/most likely/maximum 119.3/142.6/168.3 MMBbls.
Recovery factor estimates will be revised during the full field
reservoir simulation studies which will now commence.
About Cronx:
IOG has agreed to acquire 100% of Cronx (Block 48/22a, licence
P1737) which is subject to completion. The Cronx gas discovery is
14km north-west of the Blythe field. Cronx was discovered in 2007
by well 48/22b-6 drilled by Perenco UK Ltd.
IOG commissioned an independent CPR by ERC Equipoise on Cronx in
July 2012 which shows a base case expected gas recovery of 17.6 BCF
or 3.4 MMBOE 2C resource. IOG anticipates completing the Cronx
acquisition by the end of October 2016. IOG is currently evaluating
options for the development and export of the Cronx gas.
About Truman and Harvey:
IOG has a 100% working interest in a licence awarded in the 27th
licensing round to the east of Blythe containing the Truman
prospect and Harvey discovery. IOG estimates potential resources in
this licence of 16 BCF or 3.1 MMBoe. These 100%-owned fields have
potential resources that could be tied back to nearby
infrastructure being developed for the Blythe development.
About Elgood and Hambleton:
IOG has a 100% working interest in a licence awarded in the 28th
licensing round to the west of Blythe containing the Elgood
discovery (Block 48/22c, licence P2260). Elgood was drilled by
Enterprise Oil in 1991 and tested gas to surface at 17.6 MMcfd but
was not progressed by Enterprise due to size and gas prices at that
time. IOG's estimate of the recoverable reserves in Elgood is 2.1
MMBoe.
The Hambleton discovery, to the south of the same licence, was
drilled by Century Exploration in 2005 but also was not progressed
to development. IOG estimates that Hambleton has recoverable
resources of 6 BCF (1 MMBoe). IOG believes that the reprocessing of
existing 3D seismic data could increase recoverable resources up to
26 BCF.
There are prospective resources on licence P2260 of 5.3 MMBoe in
the Tetley and Rebellion prospects. Reprocessing and
reinterpretation of existing 3D seismic across 48/22a and 48/22c is
ongoing to determine whether Elgood connects to Cronx which would
boost recoverable reserves significantly. The new seismic
interpretation will also determine the likely size of Hambleton.
IOG is now working on the potential development plans and will
commission a CPR to confirm the resources over this area.
Competent Person's Statement:
In accordance with the AIM Note for Mining and Oil and Gas
Companies, IOG discloses that Mark Routh, IOG's CEO is the
qualified person that has reviewed the technical information
contained in this announcement. Mark Routh has an MSc in Petroleum
Engineering and has been a member of the Society of Petroleum
Engineers since 1985. He has over 35 years' operating experience in
the upstream oil and gas industry. Mark Routh consents to the
inclusion of the information in the form and context in which it
appears.
The company news service from the London Stock Exchange
END
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