Independent Oil & Gas: Announces Harvey licence valuation update
Independent Oil and Gas plc (“IOG” or the “Company”), the development and production focused Oil and Gas Company, is pleased to announce the recent Competent Persons Report (“CPR”) by ERC Equipoise Limited (“ERCE”), has been updated to include a fully risked, expected monetary value (“EMV”) for the Harvey licence.
Highlights
- Fully risked EMV for the 100%-owned Harvey licence of £79 million.
- Best estimate gross unrisked post-tax NPV10 of £159 million for the overall Harvey structure and £126 million for the licence.
- The EMV has been calculated on the mean of the Low/Best/High estimates of the prospective resources following the derivation of Harvey production profiles. Low/Best/High estimates of unrisked prospective gas resources are 45/114/286 BCF on the Harvey structure, 36/90/226 BCF on licence.
- Firm commitment made to drill the Harvey well within 2 years, subject to acceptance and a licence extension by the OGA. Well scheduling under consideration.
EMV is an economic metric used to evaluate investment opportunities and ensure that project economics justify both initial and overall expenditure. The CPR author estimates dry hole costs of the planned Harvey well at £8.5 million, versus a licence EMV of £79 million. IOG therefore sees a compelling case for drilling Harvey and is actively considering the timing. In the CPR success case, the EMV assumes an appraisal well in H1 2018, Final Investment Decision in H1 2019 and first gas in Q1 2021. The calculation is on a standalone post-tax basis without accounting for IOG’s existing tax loss position. The EMV is based on equivalent economic assumptions to the recent Blythe hub and Vulcan Satellites hub CPR
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