07 Mar 2014
Approval of Reserve Based Debt Facility by US LenderIndependent Oil and Gas plc (“IOG”), (AIM:IOG.L), the North Sea focused Oil and Gas Company, is pleased to announce that a substantial US financial institution has confirmed credit committee approval to provide IOG North Sea Ltd, a wholly owned subsidiary of IOG, with a US$50 million senior secured borrowing base facility (the “Facility”). The debt provider is an established specialist lender to several oil & gas businesses, including to companies operating in the North Sea.
US$25 million of the Facility is expected to be available for the Blythe field development, contingent upon certain conditions, including the following:
- the approval of a Field Development Plan;
- execution of an agreed hedging programme;
- standard security arrangements;
- provision of the balance of development and cost overrun funding;
- final confirmation of Capex and Opex being in line with the ERC Equipoise Competent Person’s Report dated September 2013; and
- finalisation of the lender's ongoing legal and technical due diligence review.
Part or all of the balance of the Facility will become available for drawdown by IOG upon the completion of the Blythe field development or sooner if appropriate assets are acquired by IOG and added to the borrowing base.
The Facility is expected to have a tenor of five years and is subject to the entry into definitive documentation. The Board of IOG currently expects this to be in place by late-March 2014 and a further announcement will be made in due course.
Mark Routh, CEO of IOG said:
We are absolutely delighted to have received credit committee approval for this debt facility on attractive terms. IOG chooses its partners very carefully and we believe that this will be a long term relationship of mutual benefit. This is another important milestone in the Blythe field development but also this facility gives us great flexibility with regards to potential acquisitions and other developments such as the nearby Cronx gas discovery. We are working towards submitting the Blythe Field Development Plan by the third quarter of this year, targeting first gas by the end of next year.
Blythe may be the first field development for IOG, but we are also planning to drill appraisal wells on Skipper this summer and on Cronx before the year end. We are actively reviewing other potential acquisitions and developments, including applications in the current 28th Licensing Round. We will update the market as we continue to deliver on our planned strategy.
About Independent Oil & Gas:
IOG is an oil & 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.
IOG has four licences in the North Sea: In addition to the Blythe and Skipper licences co-owned 50% with ATP UK, IOG has a 100% working interest in two licences awarded in the 27th licencing round. One is to the west of and adjacent to Skipper, the other is to the east of Blythe. Both these licences have potential resources that could be tied back to developments at Skipper and Blythe respectively.