IGas Energy Plc (LON:IGAS) confirmed that INEOS has completed its acquisition of interests in shale gas licences held by ENGIE E&P UK (previously GDF Suez).
It affects eleven onshore UK licences - in Cheshire, Yorkshire, Nottinghamshire, and Lincolnshire - where IGas is partnered with INEOS.
And the ‘carries’ agreed by ENGIE in prior farm-out deals with IGas are now assumed entirely by INEOS.
IGas has around US$260mln worth of exploration and development costs ‘carried’ by its larger partners via farm-out deals, and that remains a key asset for the group as it conducts a financial restructuring.
Restructuring to put IGas on sound footing
The UK shale gas group, which also produces over 2,000 barrels per day from conventional reservoirs, earlier this month revealed plans to raise US$35mln from new strategic investor Kerogen Capital alongside a debt-for-equity deal with its lenders.
It means there’ll be dilution for existing shareholders, but, the deal allows the company to alleviate financial pressures and ease its debt burden.
The extent of the debt deal has yet to be confirmed, so shareholders don’t yet know how much new equity will be issued, but, Cannacord Genuity, in a note, suggests IGas would at least half its indebtedness down to at least US$60mln, from around US$120mln.