Latest news

 

Response to Movement in Share Price

The Board of Independent Oil and Gas plc (AIM:IOG.L), the North Sea focused oil and gas Company, notes the recent rise in the Company’s share price and confirms that it is not aware of any reason for such a movement.
 
IOG is currently engaged in discussions that may lead to financing being secured to allow certain acquisitions to be concluded.  The first tranche of funding would be sufficient to allow wells to be drilled on Skipper, Cronx and Elgood and the second tranche, which would depend on the results of the initial wells, may be sufficient to bring these assets into production.  It is currently proposed that the funding would be mostly in debt at competitive rates.  The board anticipates that any equity component would be priced above the current share price.
 
It should be noted that the above transaction is subject to negotiation and the approval of various counterparties and the Company.  There can be no guarantee that the Company will secure such financing on agreeable terms or at all.
 
Furthermore it should be noted that IOG has very limited cash resources and will need to obtain funding or seek an extension to allow repayment of the loan to Darwin Strategic on or before 4th June 2015 and has limited funds to meet its ongoing expenses thereafter.  The loan and fees due are £546,550.
 
IOG is pursuing alternative sources of funding should the financing referred to above not materialise.  In the event that such financing or any alternative funding is not secured and no agreement is reached to defer the Darwin Strategic loan, IOG would be unable to meet its liabilities on 4th June 2015.

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.  The combined estimate of 2P reserves and 2C resources net to IOG is 25.4 million barrels of oil equivalent (“MMBoe”).  (Sources itemised below.)
 
Post completion of the Cronx acquisition IOG will have five licences in the North Sea:  The Blythe and Skipper licences are co-owned 50% with Alpha Petroleum Resources (formerly ATP Oil and Gas UK Ltd).  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 the development Blythe.  The Blythe owners are preparing for the submission of the Blythe Field Development Plan.
 
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 Petroleum Resources Ltd (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 which is 50% co-owned by IOG and Alpha Petroleum Resources Ltd (operator).  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.  Skipper has independently verified gross 2C resources of 26.2 MMBbls which is 13.1 MMBbls net to IOG.  The appraisal well will also target two exploration prospects directly beneath the Skipper oil discovery which may contain oil in place of 46 MMBbls.  (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 holds 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 3.4 MMBOE 2C resource.  IOG anticipates drilling a well in 2015, 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 26 BCF.

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.
 
Competent Person’s Statement:
In accordance with the AIM Note for Mining and Oil and Gas Companies, IOG discloses that Mark Routh, IOG's CEO and Interim Executive Chairman is the qualified person that has reviewed the technical information contained in this announcement.  Mark Routh has an MSc in Petroleum Engineering and has been a member of the Society of Petroleum Engineers since 1985.  He has 35 years' operating experience in the upstream oil and gas industry.  Mark Routh consents to the inclusion of the information in the form and context in which it appears.