UK-focused oil firm Independent Oil and Gas has said that it remains in talks with CalEnergy over the latter's participation in IOG's North Sea blocks.
Namely, CalEnergy Resources, part of Berkshire Hathaway Energy, had an option to acquire a 50 percent stake in IOG's Harvey and Redwell licenses in the Southern North Sea off the UK. IOG said Friday that the option had expired.
The announcement sent IOG shares down to 13,22 pence, from a previous day's close of 15,50 pence.
"However, discussions remain ongoing as to potential CER participation in these licenses," IOG said.
IOG also said Friday that further to the 48/24b-6 Harvey appraisal well drilled in Q3 2019, as previously stated the company estimates mid-case recoverable gas volumes of 40 Bcfe in Harvey and 100 Bcfe in Redwell.
"IOG continues to progress sub-surface re-mapping and modeling of the Harvey-Redwell area to further define its commercial potential," IOG said.
Andrew Hockey, CEO of IOG, commented: "We are advancing our Harvey and Redwell mapping and modeling work in order to generate optimal development plans for these assets. In the context of our Core Project, we believe they will present attractive incremental investment opportunities for the company."
IOG last year signed a £165 million farm-out agreement with CalEnergy for a 50% share in the Core Project (excluding Harvey assets) in the Southern North Sea.
In its Core Project, IOG owns a 50 percent operating stake in six proven gas discoveries plus the Thames Pipeline and onshore Thames Reception Facilities at the Bacton Gas Terminal.
After completing the Core Project farm-out with CalEnergy in October 2019, the companies took Core Project Phase 1 FID.
Initial Phase 1 platform and Subsea, Umbilicals, Risers and Flowlines ("SURF") work has been underway since FID, along with further design and engineering work on the Bacton Terminal modifications.
IOG said in January that SURF and two unmanned platform contracts for the first phase of the Core Project development were being finalized and were expected to be announced upon approval by the UK Oil and Gas Authority (OGA) of the Phase 1 FDP, expected in Q1.
The first phase of the project is expected to deliver first gas in July 2021.
The Core Project targets a gross 2P peak production rate of 146 MMCF/d (c. 25,000 Boe/d) from gross 2P gas Reserves of 302 BCF + 2C gas Contingent Resources of 108 BCF.