CALGARY, ALBERTA--(Marketwired - Oct. 24, 2013) -
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Iona Energy Inc. ("Iona" or the "Company") (TSX VENTURE:INA) announces an operational update related to its Huntington Oil Field located in the UK North Sea.
In mid-September 2013, Iona was advised by the Operator of the Huntington Field, E.ON E&P, that production would be temporarily reduced to ~40% of Huntington's Floating Production Storage and Offloading (FPSO) vessel's nameplate capacity due to curtailment of the flow of Huntington gas implemented by the Operator of the Central Area Transmission System (CATS). The Huntington Joint Venture Partners continue to work diligently through E.ON as Operator to gain clarity around the production restrictions imposed on Huntington. Previous guidance from the CATS Operator from September indicated an imminent return to full production in October. Current prognosis is that ramp-up from today's levels will now commence in early November. Since the restriction, the Huntington field and FPSO continue to operate efficiently and have produced to the maximum capacity possible under the curtailment.
BP plc, as Operator of CATS, imposed the restrictions when off-specification pipeline gas from an unknown source was delivered to the terminal. CATS is a "wet" natural gas transportation system used to export from Huntington and other UK North Sea fields to Teesside in Northern England. This restriction on gas export has necessitated a proportionate cutback in Huntington's oil production.
Based on analysis commissioned by the Huntington Operator, Iona believes that gas produced from the field is to the specification agreed under the Transportation and Processing Agreement signed with BP in July 2011. BP have indicated that due to the shutdown of other fields within the CATS system, Huntington has been restricted until such time as dry gas fields resume production, thereby allowing a blend of dry and wet gas streams. BP further indicates that constraints imposed on Huntington are likely to be lifted progressively from early November as the drier gas fields come out of maintenance shutdowns. Prior to the curtailment of production, Huntington was producing at its full capacity of 30,000 barrels of oil per day and 27 MMcf of gas per day.
The working interests in the Huntington field are E.ON E&P (25% Operator), Premier Oil plc (40%), Norwegian Energy Company ASA (20%), and Iona (15%). In addition to the working interest, Iona holds a gross overriding royalty of 2.55% of the total Huntington production, payable from the Huntington Joint Venture Partners.
Robin Baxter, Iona's VP Business Development commented: "Discussions between the CATS Operator and E.ON convince Iona that production restrictions within the CATS system, which has a remarkable 99.2% historical uptime, are temporary. BP has advised that the ramp-up of Huntington production in the near-term is possible. Under the existing transportation and processing agreement, Huntington gas delivered within specification should normally be accepted into the CATS pipeline despite maintenance and shutdown arrangements at other fields exporting through the CATS system. This temporary curtailment in Huntington production has limited impact on the long-term value of this field."
Additional information relating to the Company is available on SEDAR at www.sedar.com.
About Iona Energy:
Iona is an oil and gas exploration, development and production company focused on oil and gas development and exploration in the United Kingdom's North Sea.
Some of the statements in this announcement are forward-looking, including statements regarding Iona's business plans and production levels. Forward-looking statements include statements regarding the intent, belief and current expectations of Iona Energy Inc. or its officers with respect to various matters, including production, drilling activity or otherwise. When used in this announcement, the words "expects", "believes", "anticipate", "plans", "may", "will", "should", "scheduled", "targeted", "estimated" and similar expressions, and the negatives thereof, are intended to identify forward-looking statements. Such statements are not promises or guarantees, are based on various assumptions by Iona's management, including the assumption with respect to the timing of certain events relating to Huntington which are beyond Iona's control, and are subject to risks and uncertainties that could cause actual outcome to differ materially from those suggested by any such statements, including without limitation, the risk of unanticipated delays impacting production rates at Huntington. These forward-looking statements speak only as of the date of this announcement. Iona Energy Inc. expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based except as required by applicable securities laws.
Neither the TSX Venture Exchange Inc. nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.