LONDON (Alliance News) - Independent Oil & Gas PLC said Monday it has raised GBP16.6 million through a placing of 165.8 million shares at 10 pence per share to fund the drilling of an appraisal well.
Shares in the oil and gas company were down 27% at 12.50 pence on Monday.
FirstEnergy Capital LLP, Peel Hunt LLP, and finnCap Ltd were joint bookrunners in connection with the placing.
In addition, Independent O&G also announced plans to issue another 2.8 million shares through subscription to raise GBP275,000. It also intends to launch an open offer to raise GBP2 million from 20 million shares at 10p each.
As part of the GBP275,000 subscription, Non-Executive Chair Fiona MacAulay intends to subscribe for 200,000, or GBP20,000 worth of shares. The company's chief executive, chief operating officer, chief financial offer, financial controller, and engineering manager will each subscribe for 100,000 or GBP10,000 worth of shares.
Non-Executive Director Martin Ruscoe is to subscribe for 1.2 million shares for GBP120,000 and Non-Executive Director Esa Ikaheimonen for 500,000 shares for a total of GBP50,000. Head of Corporate Finance Rupert Newall will subscribe for 300,000 shares for GBP30,000.
Most of the proceeds from the placing, subscription, and open offer, will be used in the drilling of an appraisal well at its Harvey licence in the southern North Sea. However, around GBP2.5 million will be used to fund a field development plan for its Goddard field, which lies 70 kilometres north of the Norfolk coast.
Whatever remains will be used for working capital and project management costs in 2019.
Alongside fundraising, Independent O&G also intends to restructure its arrangements with London Oil & Gas Ltd, which is currently in administration.
As such, 12 months of GBP7.1 million debt service due to London Oil & Gas over the course of 2019 will be rescheduled and GBP1.6 million of interest due from London Oil & Gas's existing debt will be converted into shares.
Furthermore, the maturity date on warrants to subscribe for 7.5 million shares at a strike price of 9p per share and 5.8 million shares at a strike price of 11.9p per share will be extended by 12 months. The warrants were granted to London Oil & Gas in 2015 as part of a loan agreement.
The fundraising and loan renegotiations are conditional upon shareholder approval.
"After a challenging period, this funding and associated debt restructuring ensures that the company is firmly on track to advance into an exciting new phase and execute our strategy on behalf of our long-term shareholders and new institutional investors. We will now have the time and financial strength to deliver on our two key catalysts to value over the coming months," said Independent I&G Chief Executive Andrew Hockey.