26th Jun 2015 08:51
(Correcting statements on company's stake in Cronx prospect.)
LONDON (Alliance News) - Independent Oil and Gas PLC Thursday said it has removed some uncertainties surrounding the commercial volumes of its assets in its southern UK North Sea portfolio after further remapping work was completed, and said it has further strengthened its relationship with Baker Hughes with a new deal.
The offshore UK-focused company has four prospects in the southern North Sea: Cronx, which it is in the process of fully acquiring; Blythe; Harvey and Truman; and the Elgood, Hambleton, Tetley and Rebellion prospects. It also has one prospect in the main UK North Sea, the Skipper discovery.
Independent Oil said Baker Hughes RDS completed the remapping in the southern section, which helped better define the commercial volumes at both the Cronx and Elgood discoveries.
The Carboniferous resource play beneath the Blythe prospect is "encouraging" and appears to be a larger structure than first anticipated, with further analysis to be undertaken ahead of the final report from Baker Hughes expected in July 2015.
Initial results suggest that Cronx and Elgood are not linked as first thought, but nonetheless the directors anticipate that the final report will support expectations that, following the completion of a new competent persons report, the company's proven reserves could increase to 6.0 million barrels from the current 3.0 million barrel reserve, it said.
The additional Baker Hughes work to evaluate the prospectivity beneath the Skipper discovery and also to evaluate other southern North Sea prospects and discoveries including Truman, Harvey, Hambleton, Tetley and Rebellion is expected to commence once the final report is completed and subject to the company securing funding.
"We are pleased to strengthen our relationship with Baker Hughes as the initial results from the seismic remapping work are positive. We expect that the resource plays beneath the Blythe and Cronx/Elgood fields are larger than first anticipated, and with additional reservoir understanding we can more than double our proven reserves," said Chief Executive Mark Routh.
The company has now signed a memorandum of understanding with Baker Hughes for it to provide oilfield services for the Skipper development in the northern part of the UK North Sea. Discussions regarding a rig contract for Skipper are ongoing between the company and a third party, targeting a commitment well in mid-2016.
Independent is currently in the process of acquiring the 50% stake in the Cronx prospect that it does not already own and is expecting the deal to be finalised "shortly".
Independent Oil shares were down 0.3% to 18.70 pence per share on Friday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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