INA.V Iona Energy closes West Wick Acquisition
Iona Energy Inc. ("Iona" or the "Company") (TSX VENTURE:INA) is pleased to announce that its U.K. subsidiary, Iona Energy Company (UK) Limited has closed the acquisition of an operated 58.73% interest in U.K. Block 13/21a containing the West Wick Oil Field ("West Wick") from Centrica Venture Production Company ("Centrica VPC"). The U.K. government's Department of Energy and Climate Change ("DECC") has also completed the license assignment. Under the terms of the sale and purchase agreement, Iona has completed a USD$5.1 million payment to Centrica.
Iona engaged Gaffney, Cline & Associates Ltd. ("GCA") to prepare an independent reserves report of the West Wick oil field, based on the draft Field Development Plan ("FDP") for West Wick prepared by Centrica VPC (the "GCA Report"). The GCA Report was prepared in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities and has an effective date of December 31st, 2011. GCA has estimated net proved oil reserves ("1P") of 5.1 MMbbls, net proved plus probable oil reserves ("2P") of 9.71 MMbbls and net proved plus probable plus possible oil reserves ("3P") of 12.18 MMbbls.
The closing of the West Wick acquisition brings Iona's net 1P oil and gas reserves to 16.0 MMboe and net 2P oil and gas reserves to 31.7 MMboe and pre-tax net present values discounted at 10% of USD$431 million and USD$1.19 billion respectively, as evaluated by GCA (see note below). Iona's currently evaluated reserves are comprised of approximately 79% oil and 21% gas.
The West Wick oil discovery is located within UK Block 13/21a approximately 3.75 km west of the producing Captain oil field. Oil was discovered within the Cretaceous Upper and Lower Captain sandstone reservoirs and correlates to the same reservoirs of the Captain field that have produced since 1997. The West Wick field has remained undeveloped since discovered by Amoco in 1990. Since that time four delineation wells have been drilled appraising the accumulation with the last wells (13/21a-5 and 13/21a-6) drilled by Enterprise Oil in 2001. The West Wick field is a three-way dip closed structure approximately 3 km long by 2 km wide with an observed oil column of 228 ft (true vertical thickness) with oil proven though wire-line sampling that gives an API range of 13 - 21degrees, with an estimated 100cp viscosity crude in the reservoir. Iona considers West Wick fully appraised and development-ready, as confirmed by GCA's 2P reserves evaluation.
Iona intends to finalize the preferred development concept within the next few months and integrate the West Wick project schedule into its plans for the ongoing development work at Iona's Orlando and Kells oil fields, both of which are owned 100% by the Company. Iona will upgrade the draft FDP engineered and designed in 2007 by VPC with the final development concept and will move swiftly to place engineering contracts and identify critical long-lead items for procurement.
Block 13/21a is covered by 3D seismic and Iona believes the deeper Jurassic stratigraphy offers further exploration potential underlying the block and an evaluation of this potential is planned to commence immediately.
Iona's Chief Executive Officer, Neill Carson said: "We are very excited to add the Iona Operated West Wick field to our rapidly growing portfolio of high-quality development assets, and its planned development fits nicely with our goal of a new development every 12-18 months. This is clearly an area in which we can grow and compliments our development portfolio nicely. At 31.7 MMboe of 2P reserves, we believe we have reached critical mass allowing us to take the company to the next level."
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