Funding creative as Independent Oil and Gas pursues ‘contractor led’ funding

This is assumed a creative dimension in funding operational actives as independent oil and gas pursues contractors-led funding.

aims to drill Skipper in late 2015

Independent Oil and Gas (LON:IOG) has secured extensions to a number of key agreements which allows it to pursue a new ‘contractor led’ funding approach for its North Sea field development plans.

The company has told investors it aims to drill an appraisal well on the Skipper field in late 2015, and in the meantime it is working on alternative funding arrangements reported proactive investors.

It has received a rig proposal which allows a partial deferment of costs, which could enable the programme to go ahead subject to full funding of the contract and project permitting.

At the same time IOG said it is talking to several contractors regarding the provision of well services and equipment on a full cost deferral basis.

Talks are also underway with several parties over potential loan finance to bridge any funding gap relating to the Skipper commitment well, it added.

UK regulator The Oil and Gas Authority has granted an extension to the Skipper licence, by three months until December 31, and it also granted a 15 month extension to the licence for the Blythe development until December 31 2016.

“This remains a challenging time to fund and drill wells in the North Sea, but we are very pleased with the support we have had from the OGA in extending both licences and from the contractor community to help us get the exciting Skipper well drilled,” said chief executive Mark Routh.

Darwin Strategic, which was due to be repaid in September, has agreed that the £358,000 payment can be deferred until October 4 without additional charges or interest.

Darwin will be able to convert the debt into equity if the loan is not paid by then, IOG said, and the conversion price would be the equivalent to 85% of the lowest average price in the preceding 10 days.

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