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Energy Voice | Independent to raise £16.6m to fund North Sea projects

Under pressure North Sea firm Independent Oil and Gas (IOG) expects to raise £16.6 million via the placing of 166m new shares.

Bosses at IOG are currently trying to fend off a takeover attempt from rival firm RockRose Energy.

The fundraising hinges on the approval of shareholders being obtained at a general meeting later this month.

IOG also hopes to restructure its loan arrangements with its main lender, London Oil and Gas, which is in administration.

This involves rescheduling £7.1m of debt service due to London Oil by a year, converting £1.64m in interest into new ordinary shares, and a 12 month maturity extension of existing warrants.

IOG is determined to develop the Blythe and Vulcan gas hubs in the southern North Sea and is understood to be close to securing a partner.

IOG said it would use the proceeds of the placing to drill the Harvey appraisal well later this year, and to make progress with the field development plan for the Goddard gas field.

The company intends to incorporate the Harvey and Goddard fields into its “core project”.

Chief executive Andrew Hockey said: “After a challenging period, this funding and associated debt restructuring ensures that the company is firmly on track to advance into an exciting new phase and execute our strategy on behalf of our long-term shareholders and new institutional investors.

“We will now have the time and financial strength to deliver on our two key catalysts to value over the coming months.

“First, delivering the development funding for our high-return core project through the well-progressed farm-out process or via the capital markets.

“The project’s technical readiness has given us an excellent opportunity to engage with well-funded potential partners on attractive terms.

“We look forward to selecting our preferred party in 1H 2019 in a transaction which we expect substantially to cover our project funding needs, as well as providing important further industrial validation.

“We have the right team with the right experience to deliver both the development funding and the project itself, which will generate very substantial cashflow.

“Second, drilling the high-impact appraisal well at Harvey which could significantly enhance the project’s value and returns.

“Upon shareholder approval we will be fully funded to deliver this major catalyst as soon as possible, as well as the submission of the field development plan for Goddard, which is another key step in strengthening core value.”

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