Igas Energy reports progress despite pandemic challenges

Igas Energy updated the market on 2020 on Thursday, reporting that net production averaged 1,907 barrels of oil equivalent per day for the year, within guidance, while operating costs were around $33 per barrel of oil equivalent at an average exchange rate of $1.29 to sterling.

The AIM-traded firm said it expected net production of between 2,150 and 2,350 barrels of oil equivalent per day and operating costs of about $32 per barrel of oil equivalent, assuming an exchange rate of $1.35 to sterling, in 2021, subject to the ongoing challenges of Covid-19.

It said the Welton and Scampton waterflood projects were now on line and in the commissioning stage.

Both projects were completed within budget, with production uplift expected to be realised during 2021, with a maximum anticipated incremental production rate of 100 barrels per day for Scampton and 120 barrels per day expected for Welton.

The completion of those two projects had converted 840 million barrels of oil equivalent of 2P reserves from undeveloped to developed.

In its geothermal operations at GT Energy, Igas said the Stoke-on-Trent build out of a heat network had been delayed due Covid-19, with a planning decision expected before Easter, as the company explored a proposal to deliver geothermal district heating project in Stoke-on-Trent with Engie.

Ongoing discussions were taking place with the government on future financial support beyond the closure of the non-domestic renewable heat incentive to new projects on 31 March.

Igas also reported a growing development pipeline of potential projects in Newcastle, Crewe, and Southampton.

In hydrogen, Igas said that the evaluation of candidate sites with BayoTech was underway, with the firm expecting to advance projects in 2021.

The company had announced a partnership with modular steam methane reformation equipment manufacturer BayoTech in October.

“Despite the significant challenges that 2020 presented, we have continued to make good progress in a number of key strategic areas,” said chief executive officer 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 million barrels of oil equivalent, and a continuing high reserves replacement of over 250%, demonstrating the significant value and upside that remains in our conventional portfolio.”

Igas said it would announce its final results for the year ended 31 December on 7 April.

At 1219 GMT, shares in Igas Energy were down 3.77% at 26.51p.