Independent Oil and Gas plc to acquire from Alpha Petroleum Resources Limited
Independent Oil and Gas plc, the development and production focused oil and gas company, is pleased to announce that its wholly owned subsidiary, IOG North Sea Limited, has signed a Sale and Purchase Agreement ("SPA") to acquire from Alpha Petroleum Resources Limited ("Alpha") the 50% of Blocks 48/22b and 48/23a in the Southern North Sea not already owned by the Company. These blocks contain the Blythe gas discovery.
On 18 April 2016 the Company signed an SPA to acquire the other 50% of the licence covering Blocks 48/22b and 48/23a in the Southern North Sea, containing the Blythe gas discovery, from Alpha for an initial consideration of £1.5 million payable at completion with deferred consideration of a further $5 million to be paid at first gas.
Blythe needs no further appraisal and this transaction will immediately double IOG's independently verified 2P reserves by 17.2 BCF to 34.3 BCF or 6.1 million barrels of oil equivalent .
Upon completion of the acquisition and the approval from the Oil and Gas Authority, IOG will become Operator and will own 100% of the licence.
As announced on 28 August 2015, the licence was extended to 31 December 2016.
Mark Routh CEO of IOG commented:
"We are delighted to announce the signing of the SPA to acquire the remainder of the highly attractive Blythe gas discovery. This transaction not only adds material 2P reserves of 17.2 BCF at a very low cost equivalent to $2.31/Boe but also more importantly gives the Company 100% ownership and full control of the future development of Blythe. We can now move ahead to co-develop Blythe with our other assets in surrounding licences which are 100% owned by IOG in line with our hub strategy. Our next task will be to deliver the Field Development Plan for Blythe to the OGA and work on that has already commenced.
"Upon completion of this Blythe acquisition, the Company's combined estimate of 2P reserves in Blythe and 2C resources in Skipper will be 40.2 MMBoe. When we add the 2C resource estimates in the Cronx, Elgood and Harvey discoveries, which should be co-developed with Blythe, this 2P plus 2C number rises by 8.6 MMBoe to 48.8 MMBoe.
"Crucially, owning 100% of Blythe now allows us to optimise the wider Blythe Hub development concept. IOG's initial plan is to install a small unmanned platform at Blythe with pre-installed risers to tie-back nearby discoveries making Blythe the centre of a new hub. In addition it allows us to evaluate further the discovered gas in the Carboniferous beneath Blythe and the oil discovery above Blythe in the Zechstein fractured carbonates."
Simon Hume Kendall, CEO of London Group plc commented:
"We are delighted to be supporting IOG with its strategy generally, but also specifically with regards to this acquisition. We believe that developing stranded gas fields in the Southern North Sea using innovative thinking and low cost techniques will yield excellent returns to investors. It is also very much in line with the Government's stated policy on Maximising Economic Recovery in the UK and increasing reliance on domestic gas production as coal fired power stations are phased out over the next few years."