London Oil & Gas Limited Update

RNS Number : 2745T

Independent Oil & Gas PLC

19 March 2019

 

19 March 2019

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

Independent Oil & Gas plc

("IOG" or the "Company")

London Oil & Gas Limited ("LOG") Update

Independent Oil & Gas plc notes the expected announcement today of the appointment of Finbarr O'Connell, Adam Stephens and Colin Hardman partners of Smith & Williamson LLP and Lane Bednash of CMB Partners UK Limited (the "Administrators") as joint administrators of London Oil & Gas Limited ("LOG").  Certain of the Administrators are also joint administrators of London Capital and Finance Plc ("LCF") which is a lender to LOG.

The Company is informed that the announcement due to be made by the Administrators states they understand that "the administration of LOG will preserve the significant value of LOG's key assets, being its financial interests in natural resources company, Independent Oil & Gas plc" and that "IOG is not adversely affected by the administration of LOG" and that "IOG continues to trade normally".

The board of IOG (the "Board") has been in regular dialogue with the Administrators since LCF went into administration. The Board is aware that the Administrators commissioned a third party evaluation of the Company and its assets. In light of this report, the Administrators have confirmed to IOG that they view the Company as being a key asset for LCF and its underlying bondholders and have concluded that they will achieve the best return for such bondholders by continuing to support the Company and its Board.

The Administrators have confirmed that the terms of the loans between LOG and IOG (the "LOG Loans") remain unchanged and no event of default will be triggered as a result of LOG's administration.

Aside from any contractual relationship created by the LOG Loans and the attendant right for LOG to appoint two directors to the Board, IOG and its Board are independent of LOG and the Company has a separate, refreshed and robust governance structure.

As announced on 25 February 2019, the Company continues to progress negotiations with a shortlist of well-funded farm-in partners and is well advanced with financing plans which are unrelated to and unaffected by LOG's administration. The Administrators have confirmed to the Board that they will support such plans.

This announcement has been made with the consent of the Administrators.

Andrew Hockey, CEO of IOG, said:

"We are delighted to have the support of the Administrators which will help us to proceed to Final Investment Decision on our Core Project. The additional third party validation is further proof of the considerable value of the IOG portfolio which we look forward to unlocking very soon."

Enquiries:

Independent Oil & Gas plc

Andrew Hockey (CEO)

James Chance (CFO)

Rupert Newall (Head of Corporate Finance)       [phone]

finnCap Ltd (Nominated Adviser & Joint Broker)

Christopher Raggett, Simon Hicks                            [phone]

Peel Hunt LLP (Joint Broker)

Richard Crichton, David McKeown                           [phone]

Vigo Communications

Patrick d'Ancona, Chris McMahon                            [phone]

About Independent Oil and Gas:

IOG owns substantial low risk, high value gas reserves in the UK Southern North Sea.  The Company is targeting a peak production rate of 146 MMCF/d (c. 25,000 Boe/d) from its substantial Core Project (2P gas Reserves of 302 BCF¹ + 2C gas Contingent Resources of 108 BCF²) via an efficient hub strategy.  In addition to the independently verified 2P reserves at Blythe, Elgood, Southwark, Nailsworth and Elland and 2C Contingent Resources at Goddard, IOG also has independently verified best estimate unrisked prospective gas resources of 202 BCF²,³ in Harvey and Goddard.  Alongside this IOG continues to pursue value accretive acquisitions to generate significant shareholder returns.  All IOG's licences and the Thames Pipeline are owned 100% and operated by IOG.

¹ERC Equipoise Competent Persons Report: October 2017, adjusted by Management to account for updated project timing and compression 

²ERC Equipoise Competent Persons Report: October 2018

³Updated management estimates based on interpretation and mapping of 3D seismic data reprocessed to Pre-Stack Depth Migration (PSDM) in 2018, subsequent to ERC Equipoise's 2017 Competent Persons Report 

In accordance with Rule 26.1 of the Code, a copy of this announcement will be available at www.independentoilandgas.com by no later than 12 noon (London time) on 20 March 2019. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

 

END

 

 

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