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IGas production in line as it offloads non-core assets
IGas updated the market on its trading in the year-to-date on Wednesday, confirming that net production was in line with budget for the first four months of the year at an average of 2,323 barrels of oil equivalent per day, as investors gathered for the firm's annual general meeting.
The AIM-traded company said net production for the year was still anticipated to be between 2,300 and 2,400 boepd, with operating expenditure of $32.5/boe in 2018, assuming an exchange rate of £1-$1.40.
It said its shale appraisal and development plan, covered by an up-to-$240m carried work programme, was progressing, with Tinker Lane and Springs Road construction now largely complete.
The company remained on track to spud the first well mid-2018.
Its application at Ince Marshes in Cheshire was also on course, to be submitted mid-2018.
IGas said its gas monetisation project at Albury was progressing according to plan, with a well test undertaken in April, which resulted in a flow rate of 1.5 mmscfd, in line with expectations.
The board said it remained on track for first gas in the second half of 2018, subject to planning consent.
Its other incremental production projects at Stockbridge and Welton were progressing to schedule, with the board saying the Stockbridge project was due for completion in July and the Welton injection project in September.
As it continued to identify and evaluate the future potential of its existing producing assets, IGas said it agreed to divest certain non-core assets representing around 100 boepd, to Onshore Petroleum.
A sale-and-purchase agreement had been signed for consideration of £3.14m, which would be satisfied by the provision of oil field services to IGas by OPL.
Completion of the transaction was expected in the second half of 2018, and remained subject to consent from the Oil and Gas Authority and the Environment Agency.
"The advent of higher oil prices has been beneficial in terms of operating cash flow and I am pleased that the production business is delivering in line with budget and our incremental production projects are progressing according to plan," said chief executive Stephen Bowler.
"Momentum continues in the UK shale industry with the recent completion of the first horizontal shale gas well in Lancashire and our first appraisal well in the East Midlands is due to spud in the summer, both of which will give us a much greater understanding of potential of the shale gas resource."
Bowler said that, in light of recent political events, poor weather and increasing gas prices, energy security for the UK was becoming "ever more" important.
"We believe that onshore oil and gas can be a significant contributor to the energy mix over the coming years as we seek to decarbonise our economy.
"The next few months will be important in understanding this potential."