Independent Oil and Gas Plc (LON:IOG) has brought the Skipper appraisal project, in the North Sea, back to the fore as it now plans to start drilling next month.
Having agreed outline terms for contracting and financing the well in late 2015, before putting plans on hold amid oil price uncertainty, the AIM quoted firm is now in a position to move relatively quickly.
On AIM, IOG shares advanced around 7.5% on Tuesday to change hands at 19.75p each.
IOG owns 100% of Skipper which is estimate to host some 34mln barrels of contingent resources and will be drilled in July by the Transocean Sedco 704 semi-submersible rig.
The Skipper appraisal well will be drilled down to a depth of 5,600 feet. The primary objective is to retrieve good quality reservoir condition oil samples. It is a necessary step in confirming Skipper’s potential for oil field development.
Findings from the well are expected to inform a field development plan, which could see the estimated 34.1mln contingent resource into proved and probable (2P) reserves.
It is anticipated that the drill programme will last around 22 days.
Mark Routh, IOG chief executive, described to project as “transformational”.
“We are delighted to drill it next month with a significantly reduced estimated duration and cost,” he said.
“The willingness of our financial backers and contractors to co-operate in a progressive way to make this well happen amid these tough industry conditions is testament to a new collaborative spirit in the North Sea.”
Routh added: “Our determination to move Skipper forward further underlines our commitment to the future of the North Sea and indeed this may well prove a good time to invest counter-cyclically.
“Well-managed projects on the UK Continental Shelf can create excellent value for investors and that remains our clear focus.”
Before work gets underway IOG still needs to secure technical and environmental approvals, and that process is currently underway.