LONDON (Alliance News) - Independent Oil & Gas PLC it has completed the funding needed for an appraisal well at the Harvey licence in the UK North Sea.
IOG signed for the GBP15 million non-convertible loan facility in August, securing it from London Oil & Gas Ltd.
The loan will have interest rate of LIBOR plus 9% per year and is repayable within 36 months from the date of drawdown. IOG has issued 20.0 million warrants exercisable at 32.18 pence each, with shares trading at 31.45p on Friday morning, up 0.6%.
The appraisal well at Harvey aims to find gas "across the entire structure", with spudding expected in January.
IOG said new analysis has given a 63% geological chance of success, compared to 50% last November, as well as an unrisked mid-case net present value of GBP232 million. Further, it has given a mid-case resource in place of 129 billion cubic feet of gas.
Fraser Well Management has been contracted to manage and operate the well.
Chief Executive Andrew Hockey said: "Closing the Harvey facility is an important step forward, confirming an exciting near-term value catalyst for investors within the wider context of our high-value development project."