IGas has issued a trading and operations update in advance of the Company's full-year 2022 results, which are scheduled for release on 30 March 2023. The information contained in this statement has not been audited and may be subject to change.
Chris Hopkinson, Interim Executive Chairman, commented:
'2022 has been a year of change and refocus for the Company as we optimise our existing onshore assets to better position ourselves for a lower carbon future.
Commodity prices remained strong during the period with a resulting positive impact on income and cash generation from our underlying oil and gas assets, enabling us to halve our net debt to £6.1 million (2021: £12.2 million).
We made up for significant falls in production in H1 due to equipment failures to finish the year in line with expectations, at 1,898 boepd. The Q4 production drive ensured that wells, plant and equipment had the maximum uptime. As we move into 2023, our focus will be on maintaining and increasing production on our more profitable fields, whilst attempting to drive down costs across the portfolio.
We have made significant progress during the year in bringing our vision for decarbonisation of large-scale heat using geothermal energy, in the UK, closer to fruition. We have been working closely with Government, academia and commercial partners to accelerate support for and understanding of this proven technology.'
Operational Highlights
- Net production, averaged 1,898 boepd for the year, heavily impacted in the first half by equipment failure caused by supply chain issues
- A production drive was initiated in October leading to a strong recovery in H2 resulting in peak production (averaged across 5 days) of 2,432 boepd and December production averaged 2,221 boepd (net to IGas)
- We anticipate net production of c.2,000 boepd and operating costs of c.$41/boe (assuming an exchange rate of £1:$1.25) in 2023
- Underlying operating costs for the year were c.$41/boe (at an average 2022 exchange rate of £1:$1.24)
- Planning conditions now fully discharged for the drilling of a well in the Corringham field with EA permits anticipated imminently. The development of the Corringham project has enabled the conversion of 350 mbbls 2C resources to 2P reserves as reflected in 2022 CPR with anticipated incremental production of c. 100bbls/d
- Planning application for Glentworth was submitted and validated by Lincolnshire County Council Phase I - potential for additional 200 bbls/d
- Green Heat Network Fund Investment Committee meeting delayed - funding decision now expected in the next few weeks
Reserves Update
Key highlights from the Competent Persons Report (CPR) carried out by DeGolyer & MacNaughton (D&M).
IGas Group Net Reserves & Contingent Resources as at 31 Dec 2022 (MMboe).
1P NPV10 of $144 million(2021: $139 million): 2P NPV10 of $215 million (2021: $190 million)*
The full report will be uploaded to https://www.igasplc.com/investors/publications-and-reports
Financial Highlights
- Cash balances as at 31 December 2022 were £3.1 million with net debt of £6.1 million
- Net cash capex of £7.9 million in 2022
- Successful RBL redetermination confirming $17.0 million (£14.0 million) of debt capacity
- 50,000 bbls currently hedged for H1 23 at an average swap price of $94.8/bbl
- Minimal Energy Profit Levy impact for 2022 due to available capital allowances
- Ring fence tax losses at 31 December 2022 were c.£260 million
Source: IGas Energy
