Independent Oil and Gas (IOG) announced that further to the award of Block 48/22c in the UK 28th offshore licensing round, the license area has been increased by 42sq km to the South and now contains the Hambleton discovery, in the North Sea.
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Image from IOG. |
On 6 November 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 license area to include the Hambleton discovery. This has now been confirmed and the license 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. Discussions regarding the funding of other assets in the portfolio are also ongoing. The operator of Blythe remains on track to submit the FDP application by September 2015.
“We are delighted to be awarded the increased area we requested on this license which potentially increases the commercial resources within our Southern North Sea gas hub,” says Mark Routh, IOG CEO and interim executive chairman. “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.”
The Elgood discovery (IOG 100%) (Block 48/22c, licence P2260) 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 license, 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 license P2260 of 5.3 MMboe in the Tetley and Rebellion prospects. Reprocessing of existing 3D seismic across 48/22a and 48/22c is required 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 CPRto confirm the resources over this area.
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