Andrew Hockey, CEO of the UK-based oil and gas company IOG, with gas fields in the Southern North Sea, is set to step down after nearly five years in the role. IOG's Chief Operating Officer, David Gibson, is stepping down, too.
The news of the resignations came Wednesday, a day after IOG issued an operational update informing of a drilling setback at a Southwark field well, and output guidance cuts for the Elgood and Blythe fields, all part of the Southern Banks project.
IOG said that the setback at the Southwark A1 well in the North Sea was related to drilling fluid losses, where the company decided to suspend the A1 well in order to proceed with hydraulic stimulation and commissioning of A2 to deliver Southwark field first gas in Q4 as planned. IOG expects the first gas from Southwark in mid-December. The plan is to resume work on A1 well upon bringing A2 on stream.
Hockey said Wednesday that the final connection of the Saturn Banks Pipeline System to Southwark had been affected by a defective 6" valve at the offshore 24" manifold.
“To enable safe connection, the line will be depressurised ahead of the Bacton terminal November shutdown, requiring an expected overall outage of four weeks,” he said. The shutdown is planned for late October.
IOG also said Wednesday that production from the Elgood field had recently fallen to 10 mmscf/d. This is expected to decline further by year's end.
“The decline in flow rate has been faster than anticipated given the pre-production estimated reserves range of 1P/2P/3P 9.7/14.1/18.3 BCF. The latest analysis indicates that gas is not flowing across the NW-SE oriented intra-field fault to the wellbore as expected. As a result, the most likely ultimate recovery from the field is now assessed to be 7.5 BCF, of which approximately 4 BCF has been produced to date,” IOG said.
IOG said that the combined flow rates from Blythe and Elgood over 2H 2022 to date have averaged 28.6 mmscf/d, at a volume weighted average price of 258 p/therm. Based on this, and noting the upcoming four-week outage, the expected average gross production rate over 2H 2022 has therefore been revised from 30-50 mmscf/d to 22-28 mmscf/d.
IOG said that Rupert Newall will step up to become the new CEO of IOG.
“Having led its restructuring and farm-out to CalEnergy Resources (UK) Limited (CER) in 2019, and then joined as CFO, Rupert has played an instrumental role in IOG's progress to becoming a UK gas producer,” IOG said.
Also, the IOG board named of Dougie Scott as the company's new COO.
According to IOG, Gibson has 30 years of upstream operational experience, predominantly in the Southern North Sea where he led teams delivering safe and reliable production, drilling, offshore hydraulic stimulation, green and brownfield projects. He has worked amongst others for Shell, RWE Dea UK and most recently INEOS Oil and Gas where over seven years he held the leadership positions of CEO, Operations Director and Well Delivery and Decommissioning Director.
Fiona MacAulay, Chair of IOG, said:"Under Andrew's leadership since early 2018, IOG has been transformed against considerable odds from an unfunded vehicle with disparate assets into a fully funded UK gas producer. I would like to personally thank Andrew on behalf of the Board for all his exceptional hard work and tenacity over the years and am very pleased that he has agreed to stay on to provide his invaluable advice on our 33rd licensing round ambitions. I would also like to thank David Gibson for his tireless efforts in his time as COO, tackling several complex issues to help IOG become the UK's newest gas producer earlier this year.
"As IOG navigates a challenging initial phase of production and works up further development phases, this is an appropriate time to give the executive team fresh impetus. I am delighted to announce the appointments of Rupert Newall as CEO and Dougie Scott as COO. Given their respective track records, I firmly believe that we have an exceptionally strong management team with the right skills and experience to overcome operational hurdles and grow IOG into a leading UK gas production business."
Andrew Hockey, outgoing CEO of IOG, commented:"It has been a real privilege to serve as IOG's CEO since 2018. We have made great progress in that time and with IOG now established as a gas producer, it is the right time to pass on the baton. Having worked extensively with Rupert over my career, I can vouch for his deep industry knowledge, strategic acumen, financial expertise, and drive to succeed. He has been an outstanding asset to IOG since I brought him in as CFO in 2019 and I believe he is the right leader to drive the company forward on its next stage of growth."