Independent Oil and Gas (IOG) has signed a deal which it said will be a “key step” to giving the green light to its flagship “Core Project” in the North Sea.
The firm has signed a sale and purchase agreement to acquire the Thames Pipeline reception facilities at the Bacton Gas Terminal from Perenco, Spirit Energy and Tullow Oil.
It means that, on completion, IOG will own the Thames Pipeline and the reception facilities at Bacton which will be refurbished and recommissioned.
The Core Project consists of six gas fields in the Southern North Sea, with up to 410billion cubic feet of gas.
The value of the sale and purchase agreement has not been disclosed.
IOG will take on decommissioning liabilities as a result of the deal.
The firm said this will be “key” in “delivering a farm-out transaction to enable us to progress to FID (final investment decision) at the earliest possible time”.
IOG also gave an update on plans for its Harvey prospect which is expected to start appraisal drilling next week (Aug 3) by the Maersk Resilient rig.
The Southern North Sea development is forecast by management to hold recoverable gas of between 85 and 199bllion cubic feet.
CEO Andrew Hockey said: “We are very pleased to have progressed to signing the Thames Reception Facilities SPA, which has required meticulous resolution of a number of legal complexities by working collaboratively with a range of parties. IOG is now set to be an infrastructure owner both offshore and onshore, which offers a substantial competitive advantage for an upstream company of our size and further de-risks our substantial proven gas portfolio.
“This is a key step in advancing our wider strategic and financing plans, in particular delivering a farm-out transaction to enable us to progress to FID at the earliest possible time.
“In addition, we expect to spud the exciting Harvey appraisal well around the end of next week and look forward to drilling the well safely and successfully. Given its potential size and synergies with our other assets, Harvey has the potential to create significant shareholder value.”