Independent Oil and Gas plc (IOG) has secured an extension from the Oil and Gas Authority for the Cronx licence in the UK North Sea by one year to January 9, 2017.
IOG has also agreed to extend the Sale and Purchase agreement entered into in March 2015, with Swift Exploration by 9 months to September 30, 2016. The Cronx licence has a firm commitment to drill a well and so IOG would take on that obligation at completion.
IOG said on Thursday it remained keen to complete the Cronx acquisition when circumstances allow.
IOG believes a commercial development well can be drilled and would most likely be tied back to the Blythe development in due course, the company added.
Furthermore, IOG has now received formal confirmation from the OGA that licence P2085 containing the Truman prospect and the Harvey discovery has been extended by twelve months to 20th December 2016.
The Blythe partnership is considering various ways to improve the economics of the project and has not yet committed to an offtake route. Despite the low gas price environment IOG said it believed Blythe to be economic on a standalone basis and would provide an attractive return if co-developed with IOG’s other discoveries. The partnership is in regular dialogue with the OGA on several potential variants to the development plan and the Field Development Plan can only be completed and submitted once the optimal plan is agreed by the partnership and the OGA, IOG said.
Mark Routh CEO of IOG commented: “Our Southern North Sea gas portfolio remains a core part of our business on which we believe can make attractive returns despite the current challenging price environment. We are delighted that the OGA has allowed us the appropriate licence extensions to keep the portfolio intact. We are funded to carry out a full 3D seismic reinterpretation over the portfolio which should allow us to revise resource estimates for the discoveries and prospects. We shall continue to look for new development and production opportunities to enhance the portfolio in 2016.”