REG - Independent Oil &Gas - General Meeting and Funding Update <Origin Href="QuoteRef">IOG.L</Origin>

IogAnnouncement

31/07/2015 07:01

RNS Number : 6749U
Independent Oil & Gas PLC
31 July 2015
31 July 2015
Independent Oil and Gas plc
General Meeting and Funding Update
Independent Oil and Gas plc ("IOG" or the "Company"), (AIM: IOG.L), the North Sea focused oil and gas company, provides an update on its funding plans. 
On 8 July 2015, the Company anticipated that it would be able to complete an equity subscription for gross proceeds of 7.1m in cash by the issue of 30,012,610 ordinary shares at a price of 23.79p per ordinary share with an internationally listed group with a multi-billion dollar market capitalisation by 31 July 2015. The Company also anticipated that a corresponding debt facility would be completed within two months of this date.
The Company now anticipates that the equity and debt transactions will be agreed simultaneously in mid to late August, which is later than envisaged for the equity and earlier than envisaged for the debt commitment. The Company expects that the equity subscription will be formally closed at that time while the debt would still be subject to final documentation but the Company will have a formal letter from the investor confirming the commitment.
The amount of the initial debt funding is still under discussion. The Company is prioritising completion of the acquisition of 50% of the Skipper licence and funding 100% of the commitment well including contingency.
Accordingly the General Meeting will proceed today as planned whereby shareholders will be asked to approve the resolutions as set out in the RNS on IOG's website dated 8 July 2015 which includes a link to the circular.
Discussions on a rig contract for the Skipper appraisal well and subsequent development wells are ongoing.
There can be no certainty that this or any alternative funding plans can be concluded. In the meantime IOG is funded until 4 September 2015 when Darwin Strategic is due to be repaid 358,000.
Mark Routh, CEO of IOG commented:
"We are still encouraged by the funding discussions, but finalising the size and terms of the debt commitment has taken a little longer than expected. The IOG team is working hard to ensure we agree the best deal for its shareholders."
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Enquiries:
Independent Oil and Gas plc
Mark Routh (CEO)
Peter Young (CFO)
+44 (0) 20 3051 9632
finnCap Ltd
Matt Goode/Christopher Raggett
(Corporate Finance)
+44 (0) 20 7220 0500
Camarco
Billy Clegg / Georgia Mann
+44 (0) 20 3757 4980


Notes
About Independent Oil and Gas:
IOG is an oil and gas company with established assets focused on the UK North Sea. The company's strategy is to deliver near term development and production assets in North West Europe, through its extensive technical and commercial expertise, whilst maintaining some exposure to exploration upside. The company is looking to grow both organically and through acquisition. After the completion of the Skipper acquisition from Alpha Petroleum Resources Ltd. ("Alpha") and the previously announced Cronx acquisition, the combined estimate of 2P reserves and 2C resources net to IOG will be 38.6 million barrels of oil equivalent ("MMBoe").
Post completion of the Cronx acquisition IOG will have five licences in the North Sea. Four of these licences will now be owned 100% by IOG and subject to DECC/OGA approval will be operated by IOG. The Blythe licence is co-owned 50% with Alpha which is the operator. IOG has a 100% working interest in two other licences, one awarded in the 27th licensing round and another in the recent 28th licensing round. One is to the east of Blythe containing the Truman prospect and Harvey discovery and the other is between the Blythe and Cronx licences which contains the Elgood and Hambleton discoveries and the Tetley and Rebellion prospects. Both these 100% owned licences have potential resources that could be tied back to nearby infrastructure or to the Blythe development.
Further information can be found on www.independentoilandgas.com
About Blythe:
The Blythe gas discovery straddles Blocks 48/22b and 48/23a in the Southern North Sea in licence P1736 which is 50% co-owned by IOG and Alpha (operator). Blythe needs no further appraisal and has independently verified gross 2P reserves of 34.3 BCF (6.1 MMBoe) which is 17.2 BCF (3.0 MMBoe) net to IOG. (Source: ERC Equipoise Competent Person's Report ("CPR") dated September 2013.)
The partnership is working towards submitting a Field Development Plan for Blythe by September 2015.
About Skipper:
The Skipper oil discovery is in Block 9/21a in the Northern North Sea in licence P1609. Skipper needs further appraisal by drilling a well to retrieve core and oil samples in order to design the optimum field development plan for the field. Subject to the completion of the previously announced acquisition of Skipper from Alpha, IOG can now progress to the appraisal and development stage of this asset. Skipper has independently verified gross 2C resources of 26.2MMBbls. The appraisal well will also target two exploration prospects directly beneath the Skipper oil discovery which may contain oil in place of 46MMBbls. (Source: AGR Tracs CPR dated September 2013.)
About Cronx:
IOG has agreed to acquire 100% of Cronx (Block 48/22a, licence P1737) which is subject to completion. The Cronx gas discovery is 14km north-west of the Blythe field in which IOG owns 50%. Cronx was discovered in 2007 by well 48/22b-6 drilled by Perenco UK Ltd.
IOG commissioned an independent CPR by ERC Equipoise on Cronx in July 2012 which shows a base case expected gas recovery of 17.6 BCF or 3.4MMBOE 2C resource. IOG anticipates drilling a well in 2016, subject to rig availability, the necessary permits and funding. IOG expects the well to confirm the recoverable resources, which IOG believes has the potential to be larger than the 17.6 BCF base case in the CPR. IOG is currently evaluating options for the development and export of the Cronx gas.


About Elgood and Hambleton:
The Elgood discovery (IOG 100%) (Block 48/22c, licence P2260) was drilled by Enterprise Oil in 1991 and tested gas to surface at 17.6 MMcfd but was not progressed by Enterprise due to size and gas prices at that time. IOG's estimate of the recoverable reserves in Elgood is 2.1 MMBoe.
The Hambleton discovery, to the south of the same licence, was drilled by Century Exploration in 2005 but also was not progressed to development. IOG estimates that Hambleton has recoverable resources of 6 BCF (1 MMBoe). IOG believes that the reprocessing of existing 3D seismic data could increase recoverable resources up to 26BCF.
There are prospective resources on licence P2260 of 5.3 MMBoe in the Tetley and Rebellion prospects. Reprocessing of existing 3D seismic across 48/22a and 48/22c is required to determine whether Elgood connects to Cronx which would boost recoverable reserves significantly. The new seismic interpretation will also determine the likely size of Hambleton. IOG is now working on the potential development plans and will commission a CPR to confirm the resources over this area.

This information is provided by RNS
The company news service from the London Stock Exchange
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