Independent Oil & Gas (LON:IOG)# has released its FY 2015 results with a total profit for the year of £5.3m (vs a loss of £12.1m in 2014) and a cash position of at the end of the period of £23k. This was better than our expectations due to a full reversal of the 2014 £6.2m impairment provisions against the Skipper field. Following the acquisition of the remaining 50% of the Skipper licence IOG now owns 100% of the licence and increased IOG’s independently verified 2C resources by 13.1mmbbl to 26.2mmbbl.
IOG also secured £5.5m of funding from London Oil & Gas and GE Oil & Gas during the period, additionally IOG secured a further £10m convertible loan facility from London Oil & Gas in March 2016. These loans will fund the drilling of the appraisal well on the Skipper discovery, provide funding for G&A costs and also allow IOG to pursue an acquisition strategy to focus on near term oil and gas developments. Indeed following this financing IOG signed an SPA to acquire the remaining 50% of the Blythe discovery to double its reserves on the asset to 34.3BCF at a low cost equivalent to US$2.31/boe.
The skipper well is now at an advanced stage of preparation and the Skipper licence has been extended to 31 Dec 2106 to allow IOG an extension to work on this.
All in all we are impressed by these set of results, in particular by IOG’s capability to secure funding throughout 2015 and post its year end in an extremely challenging environment which leaves it in a position of strength. IOG’s focus will now be to progress the Skipper appraisal well as it pursues its hub strategy.