IGas shares dropped nearly 18% today following news of the impact of Covid-19 on production.
The company had previously estimated 2021 production at 2,150-2,350 barrels of oil equivalent per day (boepd).
But a statement to investors today said average net production for the 12 months to December 2021 was 1,962 boepd.
IGas said production excluding the impact of Covid-19 would have been 2,100 boepd.
Operating costs for 2021 had been estimated at $32 a barrel of oil equivalent (boe). But actual costs rose to $37/boe and are expected to reach $38/boe in 2022.
IGas shares ended the day at 17.92p, down 17.6%.
IGas also gave details of current operations.
It predicted an increase of 50 bopd [barrels of oil per day] at Stockbridge, in Hampshire, with the recompletion of a suspended injection well as a water disposal well.
The company said an initial single well at Nettleham, north east of Lincoln, would be repurposed for geothermal heat. The work was scheduled for April-May 2022, to be followed by testing.
IGas also said it was reviewing sites for geothermal heat in north west England. The first site in the Manchester area was due to be confirmed in the first half of 2022, it said.
The statement also said there was no confirmed date for decisions on grey hydrogen production plans at Albury and Bletchingley in Surrey.
IGas chief executive, Stephen Bowler, said:
“2021 was a challenging year for all, with COVID-19 impacting production through resource and supply chain constraints. As we emerge out of the pandemic, and with higher commodity prices, we will balance capital investment with deleveraging the Group.
“The recognition that the strength and depth of our existing operational onshore expertise gives us in playing an important role in the UK’s transition to net zero, is evidenced by the number of new opportunities that we have announced over the last few months.
“The rationale for the rapid development of deep geothermal in the UK is compelling. A combination of higher gas prices and a need to decarbonise large scale heat has resulted in a number of proposals and enquiries for this technology to provide a solution for end users.
“We believe in the opportunities that the energy transition presents and that they will create value for our shareholders as well as contributing to the low carbon ambitions of the UK.”
Key figures for the year ending December 2021
2021 average net production: 1,962 boepd (in line with guidance)
2021 production excluding covid effects: 2,100 boepd
2021 operating costs: $37/boe
2022 estimated production: 2,000 boepd
2022 estimated operating costs: $38/boe