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IOG inks deal for Harvey appraisal drill programme

It is set for a summer drill programme, meanwhile, a farm-out partnering process is continuing.

oil and gas operations
The Maersk Resilient rig will drill the Harvey well

Independent Oil and Gas plc (LON:IOG) has inked a letter of intent with a view to contracting with Maersk Drilling for the Harvey appraisal well.

It will use the Maersk Resilient rig, currently contracted to another campaign, and the spud date for the Harvey well is anticipated in July.

The programme is expected to last two months, factoring in work that would likely follow if it was successful.

IOG has also signed a contract with Halliburton for offshore services for the programme.

READ: IOG expects to reach project funding decision in coming months

Chief executive Andrew Hockey, in a statement, highlighted that the Harvey well has the potential to significantly enhance the company’s gas development project.

“The Maersk Resilient is an excellent rig which we have secured with a summer slot which, with typically more benign weather, should also help to minimise operational risks,” Hockey said.

“In parallel, we remain resolutely focussed on progressing the Core Project, and in particular pushing ahead with the farm-out process.

“We continue to be encouraged by the progress made with potential farm-in partners and are focused on delivering an attractive transaction that allows us to progress to FID this summer.”

Additionally, the company noted that it continues efforts around its farm-out process.

It said a number of well-funded potential partners are progressing their work as part the process.

The company expects that it could provide valuable funding optionality, through a development carry which would significantly reduce the new capital needed for the development.

IOG anticipates a partnership deal will be concluded in the first half of 2019, enabling progress to a final investment decision and ‘first gas’ is due to be delivered within 20 months of the decision.

Earlier this year, IOG snubbed a takeover approach from RockRose Energy.

Quick facts: Independent Oil & Gas PLC

Price: 18.25 GBX

AIM:IOG
Market: AIM
Market Cap: £87.02 m
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