IOG expands North Sea licence area
Independent Oil and Gas plc (IOG), the North Sea focused oil and gas company, has announced that further to the award of block 48/22c in the UK 28th offshore licensing round, the licence area has been increased by 42km2 to the South and now contains the Hambleton discovery.
On November 6, 2014 the company was awarded 100% of block 48/22c containing the Elgood discovery and requested the Department of Energy and Climate Change (DECC) increase the licence area to include the Hambleton discovery. This has now been confirmed and the licence has been formally awarded.
Hambleton was discovered by Century Exploration in 2005 and has a base case of recoverable resources of 6 BCF. IOG believes that the reprocessing of existing 3D seismic data could increase recoverable resources up to 26 BCF and could therefore be potentially tied-back to the nearby Blythe development that is 50% owned by IOG. IOG is currently in discussions with several parties regarding the reprocessing of the 3D seismic data.
IOG continues to work on the potential co-development of Cronx and Elgood and is in asset level discussions regarding the funding of a well on Cronx, which is required for the completion of the Cronx acquisition. According to the company, discussions regarding the funding of other assets in the portfolio are also ongoing. IOG adds that the operator of Blythe remains on track to submit the FDP application by September 2015.
Mark Routh, CEO and Interim Executive Chairman of IOG said:
“We are delighted to be awarded the increased area we requested on this licence which potentially increases the commercial resources within our Southern North Sea gas hub. With gas prices remaining strong and rig rates and other service costs coming down, we believe this is the right time to be increasing our gas resources as part of our gas hub strategy.
We are encouraged by the discussions that we are having regarding funding at an asset level and look forward to providing further updates in due course.”