Independent Oil & Gas (LON:IOG)
Independent Oil & Gas has announced that it has submitted the Field Development Plan (FDP) for the Vulcan Satellites Hub to the UK Oil & Gas Authority (OGA). IOG recently published a CPR indicating a significant upgrade and expansion of 2P reserves on the Hub.
The project is underpinned by the acquisition of the Thames Pipeline that enables IOG to tie back the gas fields into the pipeline and save significant capital expenditure thereby enhancing the project economics as demonstrated by the recent CPR. Furthermore, IOG has reduced the upfront funding requirement via agreements with various major contractors such as Schlumberger, Heerema and ODE as part of their service contracts. These commitments from major service contractors further demonstrates confidence in the project as well as enhancing IOG’s ability to fund the development and retain its 100% ownership.
We reiterate our Buy recommendation.