Independent Oil and Gas Plc (LON:IOG) told investors it has agreed a deal with Schlumberger in relation to the development of its two southern North Sea gas hubs.
It said it has a signed letter of intent and master service agreement covering the Blythe and Vulcan projects, providing a framework for the oil services major to assist IOG in taking the assets to final investment decision.
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"We are delighted to attract a major contractor of the calibre of Schlumberger to the project, which is further vindication of our dual gas hub development strategy,” said Mark Routh, interim chairman.
“The range of services and deep technical expertise provided by Schlumberger will be very valuable for us both in the pre-development phase and the drilling and operational phases of the project.
“We look forward to finalising terms with Schlumberger and other key contractors in the coming months. Our commercial model aligns the incentives of all project participants towards the efficient delivery of IOG's substantial gas resources.”#
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Routh added that talks are progressing with potential off-take buyers for the projects’ future gas production, and that the deals would involve prepayment arrangements which would ‘contribute significantly’ to the required development funding.
In London’s early deals, IOG shares rose around 9.5% on Monday to change hands at 17.18p.