KEYFACT Energy
Independent Oil and Gas plc ("IOG") has signed a Sales and Purchase Agreement (SPA) with Perenco UK Limited, Tullow Oil SK Limited and Spirit Energy Resources Limited 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 BCF¹,² of 2P+2C reserves and resources across six discovered Southern North Sea (SNS) gas fields.
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. As expected and as is standard in such transactions, IOG will take on security obligations relating to decommissioning of the facilities at end of project life.
Additionally, with respect to the forthcoming Harvey appraisal well, the Maersk Resilient is currently due to finish its prior operations over the coming week and start re-locating to Harvey. As such, the Harvey well is expected to spud around 3rd August, although this date is still subject to date of release from its current contract over the coming days. As previously indicated, the well is expected to take approximately two months in the success case. Further details about the Harvey opportunity are available in a presentation on the IOG website.
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."
¹ERC Equipoise Competent Persons Report: October 2017, adjusted by Management to account for updated project timing and compression
²ERC Equipoise Competent Persons Report: October 2018
³ Updated management estimates based on interpretation and mapping of 3D seismic data reprocessed to Pre-Stack Depth Migration (PSDM) in 2018, subsequent to ERC Equipoise's 2017 Competent Persons Report