IOG – Harvey Appraisal Well Update

Independent Oil and Gas plc (“IOG” or the “Company”), the development and production company focused on becoming a substantial UK gas producer, is pleased to provide an update on preparations to drill the high-impact Harvey appraisal well.

Harvey well contracting & permitting

The Company has signed a Letter of Intent with a view to contracting with Maersk Drilling UK Ltd for the Maersk Resilient jack-up rig to drill the Harvey appraisal well. Built in 2008, the  Maersk Resilient is a high-spec rig with a strong operating history and an excellent safety record. The well is planned to follow on directly from the rig’s current campaign, with the spud date at Harvey currently expected to be in July. In the success case, with full coring and testing, the well would be expected to take approximately two months.

The Company is also close to finalising a contract with Halliburton Manufacturing and Services Ltd to provide offshore drilling services on the Harvey well. As previously announced, Fraser Well Management Ltd  has been appointed as Well Operator for the well. The relevant geophysical and geotechnical surveys for the Harvey well have already been carried out by Fugro GB Marine Ltd in late 2018.

Following the Company’s successful equity fundraise in April 2019, required long-lead items have been ordered and the relevant regulatory approvals and permits reflecting the choice of the Maersk Resilient are being submitted to the OGA for final approvals. These are expected to be granted at the relevant times ahead of the spud date to ensure timely operations.

Harvey well objective & rationale

The primary objective of the Harvey appraisal well is to confirm gas resource volumes which management estimate at 85/129/199 BCF Prospective Resources in the Low/Best/High case, with a 63% Geological Chance of Success¹. These estimates are the result of Pre-Stack Depth Migration (PSDM) 3D seismic reprocessing undertaken during 2018 which provided a more accurate map of the Harvey structure, which is held 100% by the Company following the successful acquisition of the Harvey East licence in the 30th Licence Round. The PSDM work also showed up prospects in the Harvey and Harvey East licences that could be matured into further step-out exploration opportunities drillable from a future Harvey platform. The Harvey East licence also contains the Redwell discovery on which further technical work is ongoing to establish commerciality.

Harvey is centrally located within IOG’s asset portfolio, close to the fully-owned and proven 550 MMcfd capacity Thames Pipeline. If successfully appraised, the additional scale and synergies of a Harvey development could substantially enhance the portfolio’s overall value and returns.

Farm-Out Process

Alongside preparations for Harvey, the Company’s focus remains firmly on reaching Final Investment Decision (FID) at the earliest feasible time on its Core Project, which comprises 410 BCF²,³ of 2P+2C reserves and resources across six discovered Southern North Sea (SNS) gas fields. A number of well-funded potential partners are progressing their work as part the previously announced farm-out process. On success, this process could provide valuable funding optionality via a development carry which would significantly reduce the new capital required for its Core Project. Management expects to select a preferred partner in 1H 2019, thereby enabling an optimal choice between an industrial and/or capital markets funding solution for Final Investment Decision (FID). First Gas is planned to be delivered within 20 months of FID.

Andrew Hockey, CEO of IOG commented:

“We are very pleased to be working with Maersk Drilling, Halliburton and Fraser Well Management on the exciting high-impact Harvey appraisal well, which has the potential to significantly enhance our SNS gas project. The Maersk Resilient is an excellent rig which we have secured with a summer slot which, with typically more benign weather, should also help to minimise operational risks.

In parallel, we remain resolutely focussed on progressing the Core Project, and in particular pushing ahead with the farm-out process. We continue to be encouraged by the progress made with potential farm-in partners and are focused on delivering an attractive transaction that allows us to progress to FID this summer.

We look forward to updating our shareholders on progress on these key milestones for the Company.”