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Independent Oil & Gas to take control of Skipper appraisal programme

IOG says it is still committed to the original schedule, and by taking on the project it expects that the appraisal well can still be drilled within the ‘good weather’ window, in summer 2014, which will be crucial in the completion of the planned phase of well testing.

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North Sea oil firm Independent Oil & Gas (LON:IOG) has decided to take control of the Skipper appraisal project, and it is now in the process of becoming the operator of this project.

This move comes amid a number of changes in the Skipper venture, including an imminent change of ownership of their partner, with private equity backed Alpha Petroleum taking over ATP Oil & Gas.

ATP no longer has a rig contract for the planned Skipper appraisal well, and subsequently IOG has chosen to take proactive steps to keep the project on track.

IOG says it is still committed to the original schedule, and by taking on the project it expects that the appraisal well can still be drilled within the ‘good weather’ window, in summer 2014, which will be crucial in the completion of the planned phase of well testing.

The company is seeking an alternative rig contractor, and, supported by AGR Well Management, it is in talks to secure long lead items for the programme, and is also working to secure a replacement rig slot.

In the meantime, IOG says there have also been ongoing talks about a possible off-take deal related to the Blythe project, another joint venture (JV) with ATP, and it reckons it can better represent the partnership’s interests in these discussions.

The sale of ATP to Alpha Petroleum is still progressing towards completion, IOG told investors.

In Tuesday's statement chief executive Mark Routh said: "IOG is pleased that the sale of ATP UK is progressing.

“Whilst we continue to hold their team in the highest regard, they are restricted from making any significant commitments on our joint licences until the sale completion.

“We therefore had to take action to protect the schedules, particularly for the Skipper appraisal well, which is a licence commitment that would otherwise slip into 2015.

“I have experience of running a company which was a successful production operator in the North Sea and the board is confident that IOG has the capabilities to repeat that success with Skipper and Blythe.

“The partnership with AGR enhances IOG's capability to deliver its business plan on schedule and as operator of its assets. We can now look forward to 2014, confident of realising shareholder value from our core assets and the wider portfolio."

The Skipper heavy oil field is currently estimated to host around 26mln barrels of oil and IOG owns 50%.

Quick facts: Independent Oil & Gas PLC

Price: 13 GBX

AIM:IOG
Market: AIM
Market Cap: £62.42 m
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