--UPDATE ADDS BACKGROUND--
North Sea oil junior Independent Oil & Gas (LON:IOG) has revealed it is closer to securing a significant new funding package.
A letter of intent has been signed with “an internationally listed group with a multi-billion dollar market capitalisation” relating to this funding, IOG said.
Securing the cash will set in motion a growth plan that could see IOG establish production in the order of 20,000 barrels oil equivalent per day (boepd) by 2018.
Those plans were boosted by a deal, announced today, for IOG to take full ownership of the Skipper appraisal project.
IOG is acquiring the 50% of Skipper it doesn’t already own from partner Alpha Petroleum.
The deal adds some 13.1mln additional barrels of independently verified 2C resources.
It is proposed that IOG will drill an appraisal well at Skipper in around a year’s time though that will be subject to an extension of the licence beyond the current deadline of September 30.
IOG is already in advanced talks with a contractor for a well and the subsequent development of the Skipper field.
The company told investors that it continues to make good progress towards securing long term financing to pay for enable the development of a number of assets, including Skipper.
Mark Routh, IOG’s chief executive, told Proactive Investors last month that the new financing would enable the group to establish a production base in the order of 12,000 boepd.
With the acquisition of Skipper the IOG chief now believes that goal would increase to around 20,000 boepd.
Completion of the funding deal is anticipated by mid-August, the company added, though it also issued a customary warning to investors that there can be no guarantee that the deal will be secured.
Routh, in a statement said: "We have been working hard to secure full ownership of this highly attractive licence and to secure the necessary funding.
“We are delighted to be making positive progress on both fronts and look forward to updating shareholders on our financing in the near future."
IOG’s Skipper transaction with Alpha is conditional on IOG securing financing and regulatory approval.
IOG and Alpha are also joint partners in the Blythe asset, the first field in a planned ‘hub’ project. Here, the partners both remain committed to submitting a field development plan to the UK authorities by the end of September.