Independent Oil & Gas (IOG) has gained a significant reserves upgrade for its southern North Sea gas assets off the UK, including the so-called Vuclan Satellite fields for which a development plan is due to be filed imminently.
Proven and probable reserves are now estimated at 303 billion cubic feet, up from a previous estimate of only 34 Bcf, for the trio of Vulcan Satellites together with the Blythe and Elgood fields, the London-listed company said in a statement.
The assets are expected to deliver combined peak production of 200 million cubic feet per day and have a net present valuation of £321 million.
It follows an independent assessment of the five development fields by ERC Equipoise based on geological modelling carried out this year by IOG using reprocessed 3D seismic to determine optimal well placement and production forecasts for each field.
In addition, the company is set to receive shortly a further competent person’s report on the Harvey structure that is set to reveal “significant prospective resources”, it stated.
Chief executive Mark Routh said a development plan for the Vulcan Satellites - Vulcan North West Vulcan East and Vulcan South - is due to submitted to the UK authorities later this month and IOG has also applied to change their respective names to Nailsworth, Elland and Southwark.
The trio are now estimated to hold 248 Bcf in proven and probable reserves following the revised assessment.
“We also expect to confirm further key project contractors in the coming weeks,” he stated.
He characterised the reserves upgrade as “a major landmark for our portfolio and clear vindication of our strategy of acquiring neglected and stranded assets at low cost, to be commercialised via our gas hub strategy using the Thames Pipeline export route”.
IOG acquired a 100% interest in the four blocks hosting the Vulcan Satellites through its £5 million purchase of Oyster Petroleum from the latter’s parent Verus Petroleum last year.
The satellites, spread across blocks in southern North Sea licences P039, P2122, P130 and P1915, lie 30 to 45 kilometres east of the Blythe field that is wholly owned and operated by IOG.
The operator filed a development plan this summer for the Blythe Hub project to exploit the Blythe and Elgood fields, with a final investment decision due in the first half of next year and first gas in the first half of 2019.
Blythe is now estimated to hold 2P reserves of 33 Bcf and Elgood 22 Bcf.
IOG intends to use the Thames Gas Pipeline, with capacity of 300 MMcfd, for exports from its southern North Sea gas fields having acquired the 24-inch route from Perenco, Centrica Resources and Tullow Oil earlier this year.