CALGARY, ALBERTA--(Marketwire - Oct. 30, 2012) -
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Iona Energy Inc. ("Iona" or the "Company") (TSX VENTURE:INA) is pleased to announce that the U.K.'s Department of Energy and Climate Change ("DECC") has awarded Iona's UK Subsidiary, Iona Energy Company (UK) Limited, three UK North Sea Blocks at 100% working interest, including two oil discoveries.
The three awarded Blocks, 3/7c (part), 3/8c, and 3/12 (part), are located in the Northern North Sea, to the south-west of the Ninian field and immediately adjacent to Iona's 100% Block 3/8d which includes the to-be-developed "Kells" Oil and Gas field and the "Ossian" Oil discovery.
In keeping with Iona's development focus these newly awarded Blocks contain two adjacent undeveloped oil discoveries referred to by Iona as "Ronan" and "Oran".
Ronan was discovered in 1977 by Well 3/7-3 which encountered a 36ft oil column in the lower part of a truncated Brent sequence. A wireline fluid sampler recovered oil and a core was taken which confirmed good reservoir quality with a porosity range of 15 to 17%. The discovery was appraised a year later by Well 3/12-2 which encountered a similar column of light oil (38.5 Deg API). In both cases the Brent sequence was fully oil bearing and, in Well 3/12-2, oil was also present within thin sands in the underlying Cormorant formation. According to a summary of Well 3/7-3 as published by DECC1, the mapped extent of the discovery containing the two wells extends approximately 7 by 4 Kilometers ("km"). In the near future, Iona intends to engage its reserve evaluators to complete independent NI 51-101 reserve reports on both discoveries.
Oran lies on a fault terrace immediately to the east of Ronan and was discovered in 2005 by Well 3/7a-8 which encountered a thicker 101ft gross Brent sequence of which 54ft was net oil pay. Again the Brent formation was fully oil bearing but the well was not tested. According to the DECC, in the published summary cited above, the 3/7a-8 discovery has a mapped extent of approximately 2.5 by 4 km.
Both discoveries lie west of, and up-dip from, Iona's Ossian discovery (made by the 3/8a-12 well in 1986) which encountered in a down-dip location a 33ft oil column in a 220ft gross Brent sequence mapped within a 2 by 3 km fault block and which flowed 650 bopd of 42 deg API oil during a limited exploration test.
As all three discoveries are in close proximity to each other (within 8 km), and as only oil columns (no water legs) have been encountered, Iona is of the view that a joint development is possible based upon current estimates of oil volumes and further appraisal is likely to increase oil volumes significantly. These discoveries, together with the pending Kells development, have the potential to create a synergistic (100% Iona owned) 'South of Ninian' development Hub.
Colin Tannock, Iona's VP of Geoscience stated that, "I am pleased with this award. We have been looking at the possibility of a cluster development for this area for some time. Now that we have all three discoveries, we can commit to an early reprocessing of the 3D seismic data and press on with development planning".
Other 27th Licensing Round applications were submitted by Iona for open blocks within the UKCS Southern Gas basin. Iona notes that blocks within this area, either due to being within, or in proximity to, special areas of conservation or protection may be subject to further environmental assessments and have not been awarded at this time.
(1) Source of information: We refer to the DECC published 3/7-3 Well Summary, which can be found online at http://www.og.decc.gov.uk/UKpromote/leads_and_discoveries/Disc_3_7_3.pdf . Iona has no reason to believe these DECC published reserve estimates comply with Canadian NI 51-101 standards of reserve reporting and the reader should evaluate at their own risk.
Additional information relating to the Company is available on SEDAR at www.sedar.com.
About Iona Energy:
Iona Energy Inc. and its wholly owned subsidiary Iona Energy Company (UK) Limited (collectively, "Iona" or the "Company"), 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 plans with respect to development of the Staffa property. 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 reserves, 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 and are subject to risks and uncertainties that could cause actual outcome to differ materially from those suggested by any such statements. 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.