Independent Oil and Gas plc (IOG), the North Sea focused oil and gas company, will need more time to secure funds for the acquisition of interest in licence P1609 in the UK North Sea containing the Skipper discovery.
Namely, on June 3, 2015, IOG announced that it had signed a Sale and Purchase Agreement (SPA) to acquire 50% of the licence P1609 containing the Skipper discovery in block 9/21a from Alpha Petroleum Resources Ltd. (Alpha). The timing of this transaction was linked to the funding that was expected to be secured by mid-August 2015.
As IOG said on August 7, 2015, the fundraising transaction is no longer proceeding as one of its potential investors pulled out. IOG says it is now actively pursuing alternative funding opportunities. Consequently, the company has agreed an initial extension to the Skipper SPA with Alpha to September 7, 2015.
Under the terms of the Skipper SPA, IOG will pay a nominal consideration to Alpha upon completion of the SPA and then two staged payments: $3m at Field Development Plan approval of the Skipper development and $15m at first oil from the Skipper field.
IOG says it continues to work on securing a rig contract and the required funding for the Skipper commitment well. Completion of the transaction is subject to the normal OGA approvals and the approval of IOG to assume operatorship of the licence.
Mark Routh, CEO of IOG commented: “We are pleased to have a little more time to close out this transaction, which will optimise our chances of securing the funding required to drill the commitment well on Skipper.”