(Alliance News) - Independent Oil & Gas PLC said Monday it has raised EUR100 million via a five-year senior secured bond issue to fund development of the company's core project in the UK Southern North Sea and for general corporate purposes.
"This bond is a very significant step forward for IOG, fulfilling the key condition to farm-out completion. Raising EUR100 million in debt finance demonstrates the robustness of our Core Project in the UK Southern North Sea, for which we will be fully funded at Farm-out completion. Farm-out completion will trigger Phase 1 FID which will be a major milestone for IOG, signalling the start of the project execution phase," said Independent Oil Chief Executive Andrew Hockey.
In July, Independent Oil entered a farmout agreement with CalEnergy Resources Ltd for half of its southern North Sea assets
The farmout, which included a condition for Independent Oil to raise new capital, was for Independent Oil's upstream assets, as well the Thames Pipeline and Thames Reception Facilities. The company's Harvey licenses were excluded from the agreement, however.
The EUR100 million bond bears an interest rate, payable quarterly, of 9.5% per annum over the three month Euribor rate. It is callable after 3 years with an initial call premium of 50% of the coupon, declining by 10% every six months thereafter.
Independent Oil said it also has the option to raise up to further EUR30 million amounts through further issue of bonds. The so-called Tap Issue carry identical terms to the initial EUR100 million bond issue but may be issued at different prices, the company added.
London-listed shares in Independent Oil & Gas were up 3.5% at 18.75 pence each on Monday afternoon.