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Independent Oil and Gas says it is in financing talks

Published: 15:57 08 May 2015 BST

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Independent Oil and Gas (LON:IOG) told investors it is in talks that may lead to a financing that would allow acquisitions to be concluded.

After the North Sea junior’s shares jumped around 19% the company issued a statement saying it is not aware of any reason for the movement.

The first tranche of any funding would be sufficient to allow wells to be drilled at the Skipper, Cronx and Elgood projects, IOG said. A second tranche would depend upon the results of the wells, it added, and it may be sufficient to bring the assets into production. 

It is proposed that the funding would be mostly debt, and would be at competitive rates, and any equity component will be priced above the current share price.

The company added that alternative sources of funding are also being pursued.

The statement included customary warning to investors that ‘the transaction is subject to negotiation and the approval of various counterparties and the company’ and that there can be no guarantee that the company will secure any financing on agreeable terms.

IOG also warned that it currently has very limited cash resources and will need to either secure funds by June 4, or agree an extension to a loan from Darwin Strategic. Some £546,550 is due on that date.

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