LONDON – Independent Oil and Gas has signed a memorandum of understanding (MOU) with Ping Petroleum (Bermuda) to jointly evaluate and bid for producing assets on the UK continental shelf.
Management from both companies worked together previously at Newfield Exploration and share the same goals on acquiring assets. They have already evaluated several candidates.
IOG plans to drill wells next summer on the Cronx and Skipper fields in the North Sea. The company says the costs of these wells would generate significant capital allowances that could be offset against production revenues from any acquired assets.
Under another new MOU, AGR will provide IOG with well construction and well project management services for the planned wells. AGR has already begun discussions with various rig owners on securing a rig for the program.
The current plan for Cronx in the southern gas basin is to drill a pilot well to confirm the crest of the reservoir and to retrieve core and gas samples, allowing IOG to firm its 3.4 MMboe resource estimate and optimize the development.
The well would then be suspended for re-use as a producer, with a horizontal section potentially drilled later. IOG assesses costs of the wells at $10.1 million at current rig rates.
Its base case development plan is to tieback Cronx to a new hub serving the Blythe field. But Cronx could also be tied back to other nearby infrastructure, allowing first gas to be produced in late 2016.