Iona Energy Inc.
TSX VENTURE : INA

Iona Energy Inc.

October 15, 2014 03:51 ET

Iona Comments on Noreco Update

CALGARY, ALBERTA--(Marketwired - Oct. 15, 2014) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR DISSEMINATION IN UNITED STATES

Iona Energy Inc. ("Iona" or the "Company") (TSX VENTURE:INA), a Canadian independent oil & gas company with assets in the UK North Sea, previously announced a Huntington Field update on 1st October 2014. The Company notes the press release made by Norwegian Energy Company ASA ("Noreco") made this morning and would like to comment on that announcement for the sake of clarity and information to all Iona shareholders, bondholders and to the market generally.

The main points that Iona wishes to clarify are as follows:

No new information - the release by Noreco confirms again the situation on Huntington gas export and the duration of the restriction and shut down. From Iona's perspective, there is nothing new to disclose since Iona's announcement regarding the Huntington restriction and shut down issued on 1st October 2014.

Huntington Operator working on mitigating measures - the release by Noreco confirms that the Operator, Eon, continues to work on possible gas disposal options. Iona is highly supportive of this work.

Review of Operator estimates by Noreco - the release by Noreco mentions a "thorough review" of Eon estimates. Iona continues to be of the view that information so far supplied by the Operator is preliminary, is on a "do nothing" basis and in accordance with all proper and prudent oilfield practice. As a result it will not reflect what will be an evolving work programme by the joint venture to remedy any anticipated production shortfalls. The Operator continues to work on options to maximise recovery from the Huntington field and is expected to propose a work programme in support of this.

Noreco's Huntington impairment from a higher 2P reserve base - the release by Noreco reiterates a previous announcement of a write down in Noreco's carrying value of its share in the Huntington Field. Whilst it is not normally the practice of Iona to comment on another company's reserve position, the Company feels obligated to comment in this circumstance. In public domain information released previously, Noreco confirmed that it had attributed 2P gross reserves for Huntington as at 31 December 2013 of approximately 39 mmboe(1). The equivalent number held by Iona at the same date was and remains 29 mmboe(1). The main difference between the two figures is believed to be that Noreco included reserves from the low resistivity zone ("LRZ") of the Huntington Forties reservoir. Iona does not include reserves from the LRZ.

Iona reiterates a previously announced statement that, based on current data, it does not consider that any carrying value write down on its Huntington reserve base would be justified.

Iona will update shareholders when it has new and material information regarding Huntington to report to the market.

Additional information relating to the Company is available on SEDAR at www.sedar.com.

About Iona Energy:

Iona is an oil and gas company with assets in the United Kingdom's North Sea.

Note:

  1. Iona's estimate of the gross proved plus probable (2P) reserves for the Huntington field as evaluated by its independent reserves evaluators, Gaffney, Cline & Associates Ltd. as at December 31, 2013. Noreco's estimate of the gross 2P reserves for the Huntington field as at December 31, 2013 as disclosed by Noreco in its Q2 2014 presentation dated August 14, 2014.

Forward-Looking Statements

Some of the statements in this announcement are forward-looking, including statements regarding business plans of Iona, Huntington timelines and Huntington reserve estimates. Forward-looking statements include statements regarding the intent, belief and current expectations of Iona Energy Inc. or its officers with respect to various matters. 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 assumptions 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. 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.

Notes on Oil and Gas Disclosure

As used in this press release, "boe" means barrel of oil equivalent on the basis of 6 mcf of natural gas to 1 bbl of oil. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

The reserves estimates contained in this press release are estimates only and the actual results may be greater than or less than the estimates provided herein. The estimates of reserves for individual properties may not reflect the same confidence level as estimates of reserves for all properties, due to the effects of aggregation.

Additionally, this press release uses certain abbreviations as follows:


Oil and Natural Gas Liquids

Natural Gas

bbls

Barrels

mcf

thousand cubic feet

mmboe

Million barrels of oil
equivalent

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.

Contact Information

  • Tom Reynolds, CEO
    +44 (0) 1224 228400

    Billy Clegg, Camarco
    +44 (0) 20 3757 4980
    Camarco is a financial public relations group assisting the
    Company with this press release.