13th Feb 2023 10:49
(Alliance News) - IOG PLC on Monday said its 50:50 joint venture IOG-CalEnergy Resources sanctioned the Blythe H2 well and prioritised it, ahead of the Southwark A1 well.
The North Sea-focused gas and infrastructure operator said if successful, H2 would deliver higher gas production rates, expected to start with 30 million to 40 million standard cubic feet per day.
IOG expects H2, which has a budgeted net cost of GBP13 million, to spud in March and take around three months to drill.
Meanwhile, at H1, Blythe continues to produce at a gross gas rate of around 15 to 20 mmscfd, with a fixed February price of 141 pence per therm. It produces around 10,000 therms per day.
Chief Executive Officer Rupert Newall said: "The joint venture is well aligned on the compelling economic and operational case for prioritising the Blythe H2 well, which can pay back rapidly at current gas prices. This will help boost cash flow from mid-2023 while enabling us in parallel to carefully evaluate forward plans. The new management team is also reviewing the entire portfolio from subsurface, engineering, commercial and financial perspectives to ensure that we deploy our capital appropriately."
IOG shares were 2.2% higher at 4.82 pence each on Monday morning in London.
By Tom Budszus, Alliance News reporter
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