10 January 2022

IOG plc

Update on Southwark drilling operations

IOG plc ("IOG", or "the Company"), (AIM: IOG.L), the Net Zero UK gas and infrastructure operator focused on high return projects, provides a further Southwark drilling update.

Drilling operations have continued at Southwark since the first development well was spudded on 30 December 2021. However, the Noble Hans Deul rig has experienced an increasing challenge with seabed conditions that, if not remediated, would compromise rig stability.

Technical personnel have explored potential options to manage these challenges. However, on Friday 7 January, the rig owner concluded that, as a prudent precautionary measure, temporary re-location of the rig will be required to facilitate seabed remediation and enable safe continuation of Southwark drilling operations. This course of action is now in motion.

As ever, the top priority of IOG and its drilling contractors remains the safety of all personnel, whilst ensuring the safe and timely continuation of the Southwark drilling campaign. Temporary relocation of the rig minimises the safety and integrity risks to personnel and assets. The rig is expected to remain offshore with non-essential crew and equipment demobilised while the issue is rectified. Further updates will be provided once there is more certainty on the length of remediation work."

Andrew Hockey, CEO of IOG, commented: 

"This is a frustrating but absolutely necessary step to ensure we can drill and complete the Southwark production wells in a fully safe manner, which is always our foremost priority. Our team is working around the clock with our drilling contractors Noble Corporation and Petrofac to minimise the interruption and resume the Southwark drilling programme at the earliest opportunity."

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR.

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IOG's Saturn Banks Project targets a gross peak production rate of 140 mmscf/d (c. 24,000 Boe/d) from gross 2P gas reserves of 302 Bcfe¹ and management estimated 2C gas Contingent Resources of 132 Bcfe, via an efficient hub strategy based on co-owned infrastructure. In addition to its 2P reserves at Blythe, Elgood, Southwark, Nailsworth and Elland and 2C contingent resources at Goddard, it has management estimated gross 2C contingent resources of 23 Bcfe at Abbeydale and gross unrisked mid-case prospective resources of 36 Bcfe at Kelham North, 42 Bcfe at Kelham Central, 58 Bcfe at Thornbridge, 31 Bcfe at Southsea, 28 Bcfe and 19 Bcfe in the two Goddard flank structures. The Orrell discovery, with management estimated gross 2C contingent resources of 42 Bcfe, also lies approximately 50% on the P2442 licence held 50% by IOG. IOG also holds a 50% operated stake in Licence P2589, containing the Panther and Grafton gas discoveries with management estimated gross mid-case contingent resources of 46 Bcfe and 35 Bcfe respectively. In addition, IOG continues to pursue value accretive acquisitions to help generate further significant shareholder returns.

¹ERC Equipoise Competent Persons Report: October 2017, adjusted by Management to account for updated project timing and compression