Igas Energy PLC – Interim Results

Igas Energy PLC – Interim Results

IGas Energy plc, one of the leading producers of hydrocarbons onshore in Britain, announces its unaudited half-year results for the six months to 30 June 2019.

Results Summary

Six months to 30 June 2019
£m

Six months to
30 June 2018
£m

Revenues

21.2

21.1

Adjusted EBITDA

7.7

6.0

Profit/(loss) after tax – continuing activities

0.8

(1.2)

Operating cash flow before working capital movements

8.7

5.5

Net debt (excluding capitalised fees)

5.9

7.4

Cash and cash equivalents

14.4

14.5

Operational Summary

  • Net production averaged c.2,360 boepd in H1 2019 (H1 2018: 2,292 boepd) and we are expecting average net production for the year to be c.2,200 – 2,400 boepd, with underlying cash operating costs per boe anticipated to be under budget at $31/boe in 2019 (based on an average 2019 exchange rate of £1:$1.30)
  • We have continued to progress projects in our core conventional business which have the potential to add significant value to the Company and our shareholders. These include additional gas monetisation (Bletchingley), production uplift opportunities, such as water injection (Scampton North) and additional appraisal and exploration opportunities to access new fields (Weald basin – PEDL 235).
  • The SR-01 well at Springs Road in North Nottinghamshire encountered 429m of hydrocarbon-bearing Bowland Shale, throughout which significant gas indications were recorded. We have a highly positive dataset following the detailed analysis of the 147 metres of core acquired within the Bowland Shale Formation, the primary target, with estimated GIIP of over 600 bcf/square mile.
  • Restoration of the Tinker Lane site, also in North Nottinghamshire is now complete, ahead of schedule.

Corporate & Financial Summary

  • Cash balances as at 30 June 2019 were £14.4 million (H1 2018: £14.5 million) with net debt, excluding capitalised fees, reduced to £5.9 million (H1 2018: £7.4 million).
  • Operating cash flow before working capital movements in H1 2019 of £8.7 million (H1 2018: £5.5 million)
  • Hedging in place in H2 2019 and H1 2020 for 480,000 barrels with average downside protection of $53.5/bbl using put options.

Commenting today Stephen Bowler, Chief Executive Officer, said:

“We have had a good performance from our existing producing assets in the first half of the year and we continue to generate strong operating cash flow.

From the results at Springs Road, we now know we have a world-class resource and early indications are that we can attain significant gas flow from this basin.  We look forward to the full analysis of the data set and to moving forward to appraise this asset.

The independent Committee on Climate Change recognises natural gas has a significant role to play to meet the 2050 net zero emissions target.  It is clear that the UK needs a secure long-term supply of methane to meet our net zero targets and that the UK sources that methane not only from a diverse supply but also with the lowest emissions footprint – that being domestically produced onshore gas.

We were encouraged by the recent statement from BEIS and look forward to a positive dialogue with the appropriate ministers to discuss the role of indigenous oil and gas production as we move to net zero emissions in 2050.

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