Independent Oil & Gas (IOG) has received extensions from the Oil and Gas Authority (OGA) for its Cronx and P2085 licenses located in the North Sea.
Cronx
OGA has extended the Cronx license by one year to 9 January 2017. In addition, IOG has agreed to extend the sale and purchase agreement with Swift Exploration by nine months to 30 September 2016. The Cronx license has a firm commitment to drill a well, which IOG will take on the obligation at completion. IOG remains keen to complete the Cronx acquisition when circumstances allow. IOG believes a commercial development well can be drilled and would most likely be tied back to the Blythe development in due course.
Truman and Harvey
IOG has now received formal confirmation from the OGA that license P2085 containing the Truman prospect and the Harvey discovery has been extended by 12 months to 20 December 2016.
Blythe
The Blythe partnership is considering various ways to improve the economics of the project and has not yet committed to an offtake route. Despite the low gas price environment IOG believes Blythe to be economic on a standalone basis and would provide an attractive return if co-developed with IOG’s other discoveries. The partnership is in regular dialogue with the OGA on several potential variants to the development plan and the field development plan can only be completed and submitted once the optimal plan is agreed by the partnership and the OGA.
Seismic Reprocessing
IOG anticipates carrying out a full 3D seismic reprocessing from the original seismic data across its whole Southern North Sea portfolio in 2016.
“The reinterpretation work carried out over the Cronx and Elgood discoveries in 2015 has been useful, but it is felt prudent to not revise any specific resource estimates until we have a consistent set of maps across the whole portfolio. Key aims of this work will be to demonstrate commerciality or otherwise of the Harvey and Hambleton discoveries and to better define the Truman prospect. IOG is fully funded for this work program,” the company said.
“Our Southern North Sea gas portfolio remains a core part of our business on which we believe can make attractive returns despite the current challenging price environment. We are delighted that the OGA has allowed us the appropriate license extensions to keep the portfolio intact. We are funded to carry out a full 3D seismic reinterpretation over the portfolio, which should allow us to revise resource estimates for the discoveries and prospects. We shall continue to look for new development and production opportunities to enhance the portfolio in 2016,” Mark Routh IOG CEO said.