Independent Oil and Gas has extended the deadline for its acquisition of 50% of the Skipper field discovery in the North Sea after its plans to secure a high-value backer unexpectedly fell through.
IOG had initially agreed a £10 million equity investment at 23.79p with an unnamed blue-chip backer with multi-billion dollar market capitalisation. Unexpectedly, the investor got cold feet due to the renewed fall in commodity prices.
The AIM-listed firm’s shares lost almost 50% of their value at the start of the week before recovering slightly.
In June, IOG signed a sale and purchase agreement with Alpha Petroleum Resources to acquire 50% of the licence P1609 containing the Skipper discovery in block 9/21a.
The timing of the deal was linked to the funding expected to be secured by mid-August 2015. It has now agreed an initial extension with Alpha to September 7.
Under the terms of the agreement, IOG’s will now make a two-stage payment to Alpha: $3m at field development plan approval of the Skipper development and $15m at first oil from Skipper.
IOG is continuing to work on securing a rig contract and the required funding for the Skipper commitment well.
Completion of the deal is subject to the normal Oil and Gas Authority approvals.
Chief executive Mark Routh, said: “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.”
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