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Independent Oil & Gas to receive placing cash in next few days

Published: 08:25 20 Jul 2015 BST

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A larger funding would take IOG into the field development phase

Independent Oil & Gas (LON:IOG) told investors it expects to receive a previously agreed capital injection in the next few days.

The North Sea junior announced on June 22 that it would raise £145,000 with the issue of new shares at a premium price, of 23.79p. Payment was, however, subsequently delayed.

It is intended to be enough cash to cover working capital needs until September, which would give IOG sufficient time to conclude a much more significant funding deal that promises to put the company on the path to production and revenue.

Earlier this month, IOG gave investors more detail about the possible funding, which has been under negotiation for a number of weeks.

The major financing, which would enable several oil field developments, will potentially come from what IOG described as an “internationally listed group with a multi-billion dollar market capitalisation.”

IOG today told investors that the long term financing will comprise both debt and equity.

A share sale could take place before the end of July, and would see the new funding partner take up to 29.9% of the group. It is expected that the new partner would acquire just over 30mln shares at a premium price of 23.79p, and that would raise £7.1mln for IOG.

Debt financing arrangements would then follow around two months later; this element is likely to be in two parts, with the first allotment of funds made available to IOG upon completion.

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