7th Jun 2016 06:51
LONDON (Alliance News) - Independent Oil & Gas PLC Tuesday said it plans to drill the Skipper appraisal well in the UK North Sea during July this year after previously delaying the well due to the poor economic conditions, and said it has also managed to reduce the cost of the well.
Independent Oil had to secure an extension to the Skipper licence earlier this year after delaying the Skipper well. The company was originally planning to drill the well before the end of last year but pushed it back to be drilled sometime in 2016.
Skipper will now be drilled in "early July" and it will not take as a long as previously expected. Independent expects the well to take 22 days to drill compared to the previous 25 day forecast. The vertical well will be drilled to 5,600 feet and its aim is to collect reservoir samples so it can optimise the field development plan for the wider licence area.
Independent is hoping to drill two mapped reservoir structures beneath the Skipper oilfield in the Lower Dornoch and Maureen formations.
Independent believes an approved field development plan for Skipper would allow the conversion of the company's contingent resources of 34.1 million barrels of oil into 2P reserves.
TransOcean is providing the rig for the well, but Independent said it will now advance USD1.7 million to the service company, which will be part satisfied in shares with the remainder settled in cash.
Independent will settle USD496,125 of that amount by issuing 2.7 million shares at a price of 18.375 pence each. Those shares will represent around 2.9% of the enlarged issued share capital whilst the price is the same as the company's closing share price on Monday.
The overall cost of the well has been reduced to USD6.8 million, of which around USD5.7 million still needs to be paid. Independent Oil said USD3.0 million of the total consideration of the well will not be paid until December 2017, with the other USD2.7 million to be paid using existing loan facilities, it said.
Importantly, the company said the well cannot be drilled until it has secured the relevant technical and environmental approvals, including well permits, which are progressing with the Oil & Gas Authority and the Department for Energy & Climate Change.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
IOG.L