7th Feb 2014 10:07
LONDON (Alliance News) - Independent Oil & Gas PLC saw its shares jump Friday after it decided to support ATP Oil & Gas UK Ltd as operator of its Skipper and Blythe licences in the North Sea after reaching a deal over the targets for the sites, reversing a decision taken in December to replace the operator.
The oil and gas exploration and development company had said in December that it would replace ATP because it no longer had a rig contract in place for the drilling of the planned Skipper appraisal well, which was scheduled for the third quarter of 2014, after a US court approved the sale of ATP UK to Alpha Petroleum Holdings Ltd.
The company said Friday's decision followed extensive discussions with the management of ATP, which reassured IOG that the companies' interests are aligned.
The companies both agreed that they wish to progress the Skipper discovery and that, following technical evaluation, they plan to put the site into test production in summer 2014, subject to funding, rig availability and shareholder approval.
IOG and ATP both also said that they want to achieve first gas from the Blythe Field as soon as practicablel, with the agreed aim to finalise the field development plan for submission to the UK Department of Energy and Climate Change in the third quarter 2014.
The companies also said they wish to secure various third party agreements in respect of the Blythe export route and confirm site survey vessel availability.
IOG said that the acquisition of ATP UK's shares by Alpha Petroleum Holdings Ltd is scheduled to complete on Monday February 10.
ATP UK is a subsidiary of ATP Oil & Gas Corporation, which entered into Chapter 11 bankruptcy protection in 2012. ATP UK owns 50% of each of the Blythe and Skipper licences with IOG owning the remaining 50%.
The UK government has confirmed that once the ATP acquisition is complete then the Skipper and Blythe licences will both be extended by 18 months.
"Following discussions with the operator, we now feel confident that the continued appraisal and development of our key assets will be progressed with minimal delay," IOG's Chief Executive Officer Mark Routh said in a statement. "This is very good news for both IOG and its shareholders."
IOG shares were up 14.6% to 23.50 pence, putting it in the top ten AIM movers Friday.
By Tom McIvor; [email protected]; @TomMcIvor1
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