UK North Sea-focused junior explorer Independent Oil & Gas reported Thursday that the Department of Energy and Climate Change has extended the Cronx license by a full 12 months to Dec. 31, 2015. The firm said that sale and purchase agreement for Cronx has also been amended to allow it to complete the acquisition of the license by June 30, 2015.
Independent said that it remains its intention to complete the acquisition and to meet the license commitments by drilling a well soon afterwards, although these plans remain subject to financing. The company said that the base case estimate for the Cronx discovery is 17.2 billion cubic feet of gas.
Meanwhile, Independent noted that it was recently awarded license P2260, which includes the Elgood discovery adjacent to and between the Cronx and Blythe licenses. The firm anticipates carrying out some seismic reprocessing work that should confirm if both the Elgood and Cronx discoveries could be developed via a single horizontal well and also potentially determine whether other discoveries within its core southern North Sea license could be commercial developed as part of a hub strategy.
The base case recovery estimate for Elgood is 15 bcf of gas, Independent said.
Independent CEO Mark Routh commented in a company statement:
"The current environment provides great opportunities for IOG. This is the right time to increase the size of the commercial resources in our Southern North Sea Hub centered on the Blythe discovery and take advantage of the relatively favourable gas price environment and the falling rig rates, reducing development costs."
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