(Alliance News) - Independent Oil & Gas PLC said Wednesday it has finalised its project and financial planning for phase one of its Core project in the North Sea.
The company is in the advanced stages of retendering certain key project contracts and will start to recommend final awards, in line with its final investment decision.
Formal awards are expected to be made following the completed farm-out and bond issue. Assuming the final investment decision is completed in September, under the development schedule first gas from the Southwark field is expected to be reached in July 2021.
In this context, Independent has decided to optimist the phase one drilling schedule. Specifically, the drilling and completion of the Elgood subsea well will be accelerated to bring Blythe and Elgood production online three months after Southwark.
Although this will incur higher capital expenditure spend before first gas, but will increase production over winter 2021.
Looking at financing, Independent Oil & Gas expects to launch the marketing process for its proposed bond issue in the week.
The company is looking completed the farmout and the bonds at the same time, and then proceed to the final investment decision with its farmout partner in early September.
The proposed amount of the bond issue will be equal to GBP88 million.
"We are very pleased to have finalised our project and financial planning and to now be ready to launch the bond process. In conjunction with the announced farm-out, this bond issue would see IOG fully funded for Phase 1 of our Core Project without any additional equity requirement. Phase 2 will in turn be funded by Phase 1 cash flows and the Phase 2 development carry," said Chief Executive Officer Andrew Hockey.
"The bond marketing materials have now been finalised and a detailed long-form term sheet agreed. We are targeting completion of both the farm-out and bond in early September, which will lead straight to Phase 1 FID," Hockey added.
Shares in Independent Oil & Gas were marginally lower at 19.50 pence on Wednesday.