Iona Energy Inc. provides an update related to its Huntington Oil Field located in the UK North Sea, as well as a total production update for the Company.
Current production from the Huntington Oil Field is approximately 24,500 boepd gross (21,700 bopd of oil and 16.9 MMscf/d of natural gas). Net to Iona, production is approximately 4,300 boepd, which includes the Company’s royalty interests. Iona owns a 15% working interest and a 2.55% royalty interest at the Huntington Oil Field. As a result of the increased production at Huntington, Iona has reached a new production record of approximately 5,600 boepd, a 62% increase over its last publicized production rate of 3,464 boepd announced on June 10th, 2013. Iona’s net production is expected to increase to over 7,500 boepd as Huntington reaches production capacity.
With the majority of the gas compression issues having been resolved, production is expected to continue to increase towards the Floating Production Storage and Offloading (“FPSO”) unit capacity of 30,000 bopd and 27 MMscf/d within the next few weeks. Iona has been advised by the operator of the FPSO that the B-train gas compression system has been stabilized, allowing for Huntington production to surpass the 20,000 bopd milestone. Upon stabilization of the A-train, production is expected to steadily increase towards full capacity.
There have been three successful liftings of crude oil from Huntington totalling more than 500,000 barrels with a fourth lifting of over 200,000 bbls due on July 21st, 2013. Huntington produces 43º API light oil, and to date the oil has sold between par and a slight discount to Brent (USD 2/bbl). The realized price is expected to increase once the refineries see continued and regular shipments, and in the future Iona believes that Huntington production will yield a premium to Brent. Huntington gas production has realized USD 8.52/mcf.
The working interests in the Huntington field are E.ON Ruhrgas UK E&P (25% Operator), Premier Oil plc (40%), Norwegian Energy Company ASA (20%), and Iona (15%). In addition to the working interest, Iona holds a gross overriding royalty of 2.55% of total Huntington production, payable from the Huntington Joint Venture Partners.