IGas provides a reserves, trading and operational update for the year to 31 December 2019.  Final results for the year ended 31 December 2019 are expected to be announced on Thursday, 26 March 2020. 

Reserves Update

The Company publishes today its reserves and resources of its conventional oil and gas interests, as at 31 December 2019, from a Competent Persons Report ("CPR") carried out by DeGolyer & MacNaughton ("D&M"), a leading international reserves and resources auditor.

Key highlights:

Gas net reserves and resources* (MMboe):

• Significant 2P reserves replacement ~277% (1P ~192%)
• 2P NPV10 of $183 million*

*based on forward oil curve of 2020 $61.78/bbl; 2021 $58.39/bbl; 2022 $56.97/bbl; 2023 $56.54/bbl; 2024 $57.67/bbl

Operational highlights

• Net production averaged 2,325 boepd for the year, within guidance, while operating costs for the year were c. $30/boe (at an average 2019 exchange rate of £1:$1.28).  The Company anticipate net production of between 2,250 - 2,450 boepd and operating costs of c.$30/boe (assuming an exchange rate of £1:$1.30) in 2020.
• The Planning Inspector has now submitted his recommendation report on the Ellesmere Port Appeal to the Secretary of State. A decision is expected on or before 8 April 2020.
• IGas continue their work to analyse the data set at Springs Road.

Waterflood Projects remain on track both in terms of delivery and budget, and are expected to be online in H1 2020:

• Scampton Waterflood project  - pipeline construction now complete, site construction continuing as planned; and
• Welton Waterflood project - well integrity tests successfully completed and as such project will progress as planned.

Stephen Bowler, CEO, commented:
"The Production business has performed well in 2019 and continues to generate strong free operating cash flow. The good performance by our production assets alongside project results and progression means that we have today reported over 250% 2P reserves replacement, demonstrating the significant upside in our conventional portfolio.

The independent expert's valuation of our conventional assets is c. US$180 million on a 2P NPV10 basis, an increase of US$20 million compared to a year ago, which is significantly in excess of our current market capitalisation.  

During 2019, ahead of the moratorium, we also made significant progress on our shale assets in the East Midlands, confirming our prognosis that we have a world-class gas resource in the Gainsborough Trough.

The UK currently imports in excess of 50% of its energy requirements. As we transition to becoming independent from the EU and focus on our climate change ambitions, there is a growing need to develop domestic energy sources, including oil and gas, which have both economic and environmental advantages."

Link to IGas Energy UK country profile