Independent Oil & Gas (LON:IOG) believes the gas resources across its Southern North Sea (SNS) acreage could be larger than previous estimates.
Consultant Baker Hughes has been working on a re-mapping of the Cronx and Elgood discoveries, with a view to removing certain uncertainties, and the scope of this work has now been extended.
Baker Hughes's analysis so far indicates Cronx and Elgood are not linked, but nonetheless it is anticipated that IOG's proven reserves (currently 3mln barrels oil equivalent) could more than double.
It is also indicated that the resource play beneath Blythe is a larger structure than first anticipated. A full report from Baker Hughes is expected in July.
"We are pleased to strengthen our relationship with Baker Hughes as the initial results from the seismic remapping work are positive,” said chief executive Mark Routh.
“We expect that the resource plays beneath the Blythe and Cronx/Elgood fields are larger than first anticipated, and with additional reservoir understanding we can more than double our proven reserves."
Baker Hughes's broader evaluation of the SNS acreage won’t happen until after Baker Hughes completes the report, and it will be subject to funding.
This additional work will evaluate the prospectivity beneath the Skipper discovery and also to evaluate other SNS prospects and discoveries; which include the Truman, Harvey, Hambleton, Tetley & Rebellion prospects.
IOG continues to work towards securing a significant long term funding deal, to support its field development plans. The company aims to secure a deal with what it has described as an “an internationally listed, multi-billion dollar” group by mid-August.
Earlier this month IOG raised a small sum through the issue of shares at a 51% premium to its market price at the time.
Today, the company also revealed that Baker Hughes will now, following the signing of a memorandum of understanding, provide the company with oilfield services for the Skipper development as well as other projects.
IOG separately continues talks for a rig contract with a third party for a well at Skipper in mid-2016.
At the same time it is also working to secure a floating production, storage and offloading (FPSO) vessel for the project.
In regards to the Cronx field, IOG has extended its acquisition agreement so it now has until the end of 2015 to secure long term funding and close the transaction.