Independent Oil & Gas’ (IOG)# wholly owned subsidiary has signed a sales and purchase agreement (SPA) to acquire the remaining 50% of blocks 48/22b and 48/23a, which contains the Blythe gas discovery, from Alpha Petroleum Resources.
IOG will pay Alpha £1.5m on completion of the deal with a further US$5m to be paid at first gas. As Blythe needs no further appraisal and IOG already owns the other 50% this transaction will immediately double IOG’s 2P reserves on Blythe to 34.3BCF upon approval by the Oil & Gas Authority.
This deal follows the £13.55m financing transaction with London Oil & Gas and will allow IOG to develop Blythe alongside its other assets in the Southern North Sea as per its hub strategy. This is a positive step by IOG by adding significant reserves at low cost equivalent to US$2.31/boe. We maintain our BUY recommendation.