IOG eyes August spud date for Harvey, inks Thames reception facilities deal

Independent Oil and Gas (IOG) expects to start drilling its Harvey appraisal well in the UK North Sea at the beginning of August 2019. The company has also closed the deal for the acquisition of the Thames Reception Facilities at the Bacton Gas Terminal.

IOG informed on Wednesday that the Maersk Resilient jack-up – selected to drill the Harvey well back in May –  is currently due to finish its prior operations over the coming week and start re-locating to Harvey well location.

As such, the Harvey well is expected to spud around August 3, although this date is still subject to the date of release from its current contract over the coming days, the company explained.

The well is expected to take approximately two months in the success case.

Harvey is centrally located within IOG’s asset portfolio in UK Southern North Sea Blocks 48/23c, 48/24a, and 48/24b, close to the IOG owned and proven 550 MMcfd capacity Thames Pipeline.

The primary objective of the Harvey appraisal well is to confirm gas volumes which management estimate at 85/129/199 BCF Prospective Resources in the Low/Best/High case, with a 63% Geological Chance of Success and secondly to demonstrate reservoir deliverability.

SPA for Thames Reception Facilities 

IOG also said on Wednesday it had signed a sales and purchase agreement (SPA) with Perenco, Tullow Oil, and Spirit Energy for the acquisition of the Thames Reception Facilities (TRF) at the Bacton Gas Terminal.

The TRF comprises an area of land within the Perenco part of Bacton Gas Terminal where IOG’s fully-owned Thames Pipeline connects to the terminal. It contains certain gas and liquids reception equipment which is planned to be refurbished and recommissioned during the development phase of IOG’s Core Project, which comprises 410 BCF, of 2P+2C reserves and resources across six discovered Southern North Sea (SNS) gas fields.

IOG noted that the signing of this SPA is important for the Core Project as, on completion, IOG will own the reception facilities where all of its gas will land to shore before being transported into the main Perenco Bacton plant for final processing and then into the National Transmission System (NTS) for sale into the UK gas market.

The acquisition is for a nominal consideration. IOG will take on security obligations relating to decommissioning of the facilities at the end of project life.

Andrew Hockey, CEO of IOG, commented: “We are very pleased to have progressed to signing the Thames Reception Facilities SPA, which has required meticulous resolution of a number of legal complexities by working collaboratively with a range of parties. IOG is now set to be an infrastructure owner both offshore and onshore, which offers a substantial competitive advantage for an upstream company of our size and further de-risks our substantial proven gas portfolio.

“This is a key step in advancing our wider strategic and financing plans, in particular delivering a farm-out transaction to enable us to progress to FID at the earliest possible time.

“In addition, we expect to spud the exciting Harvey appraisal well around the end of next week and look forward to drilling the well safely and successfully. Given its potential size and synergies with our other assets, Harvey has the potential to create significant shareholder value.”

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