IGas plc announced it expected to increase production this year with the Welton and Scampton waterflood projects in Lincolnshire now on line.
In its unaudited operational, reserves and financial figures for the year ended 31 December 2020, the onshore hydrocarbon company said that net production was within guidance averaging 1,907 boepd for the year.
Operating costs for the year were c. $33/boe (average 2020 exchange rate of £1:$1.29).
The Reserve-Based Lending (RBL) redetermination exercise concluded in December 2020 confirmed £24 million ($31.7m) debt capacity and current headroom was £8.9m ($11.7m).
The company recorded total cost savings for the period of £0.6m with a further £1.0m to be realised in 2021.
Incurred net cash capex was £6.0m in 2020 and IGas expects net cash capex for 2021 to be £4.7m.
Cash balances as at 31 December 2020 were £2.4m with net debt of £12.2m.
| 1P | 2P | 2C | |
| Reserves & Resources as at 31st Dec 2019 | 10.55 | 16.05 | 19.51 |
| Production during the period | (0.68) | (0.68) | – |
| Additions & revisions during the period | 1.87 | 1.75 | 0.84 |
| Total change during the period | 1.19 | 1.07 | 0.84 |
| Reserves & Resources as at 31st Dec 2020 | 11.74 | 17.12 | 20.35 |
2P reserves replacement ~ 257% (1P ~275%); 1P NPV10 of $150 million: 2P NPV10 of $204 million
IGas anticipated net production of between 2,150-2,350 boepd during 2021 and operating costs of c.$32/boe (£1:$1.35).
IGas added that the Welton and Scampton waterflood projects were being commissioned after both projects were completed within budget.
A maximum increase in production rate is anticipated to be 100 bbls/d for Scampton and 120 bbls/d for Welton.
The completion of these two projects has converted 840 Mboe of 2P reserves from undeveloped to developed as per D&M 2020.
IGas is also growing a development pipeline of potential projects in Newcastle, Crewe and Southampton.
And following the company’s partnership with modular steam methane reformation equipment manufacturer BayoTech, IGas is evaluating hydrogen sites and expects to advance projects in 2021.
“Despite the significant challenges that 2020 presented, we have continued to make good progress in a number of key strategic areas,” said chief executive Stephen Bowler.
“We delivered production within guidance, commissioned our waterflood projects, which will bring increased production in 2021 and beyond and completed a significant transaction with the acquisition of the geothermal energy developer, GT Energy.
“The D&M CPR results are very encouraging and show that we have proven reserves of over 11 MMboe and a continuing high reserves replacement of over 250%, demonstrating the significant value and upside that remains in our conventional portfolio.”
The company announced that, on 4 February 2021, it had changed its registered office address changed to Welton Gathering Centre, Barfield Lane off Wragby Road, Sudbrooke, Lincoln LN2 2QX.
*IGas is also involved in geothermal energy in Stoke-on-Trent, which was delayed due to Covid-19. The company expects a planning decision before Easter 2021 on exploration with Engie.