IOG sees shares rise as North Sea well sees first gas after delays

(Alliance News) - IOG PLC on Tuesday finally confirmed first gas at its Blythe H2 well in the North Sea, after a suspected mechanical blockage and well control event caused delays in bringing the project onstream.

Gas has safely been delivered from the well into the Saturn Banks Reception Facilities and Bacton terminal, said the UK-focused offshore gas producer. The maximum well test dry gas rate was 22.8 million standard cubic feet a day, and 280 to 336 barrels a day condensate.

The well was brought onstream just a week past initial guidance of three months, despite losing over a month to the well control event. Chief Executive Officer Rupert Newall said that his team had done an "excellent job" bringing the well onstream so close to the original time frame, despite these difficulties.

In April, IOG said that while it had successfully drilled the well to the Basal Zechstein sequence, an "abnormally pressured gas and oil influx was encountered" while drilling through the Hauptdolomit formation. This caused associated drilling fluid losses.

The issue was safely managed by Petrofac Ltd and Shelf Drilling (UK) Ltd, but nevertheless caused considerable delays in bringing the well onstream.

At the time, IOG was quick to point out that encountering an oil and gas influx while drilling through the overburden above the reservoir "is a known risk in the Southern North Sea".

Last Wednesday, the firm reported a constrained maximum gas rate at the Blythe H2 well, noting evidence of a potential mechanical blockage downhole constraining flow.

On Tuesday, IOG said it was now expediting equipment to the rig to resolve the apparent downhole mechanical blockage, which if successful, "could increase H2 flow rates by around month end to the 30 to 40 million standard cubic feet per day range that [was] guided pre-well".

The well will be flowed at initial rates until specialist downhole equipment arrives on the rig within the next two weeks to assess and, if necessary, manually actuate the partially activated downhole valve.

IOG shares were trading 10% higher at 4.35 pence each in London on Tuesday morning.

By Holly Beveridge, Alliance News reporter

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