IOG.L Regulatory News (IOG)

21 December 2017

Independent Oil and Gas plc

Successful conclusion to Skipper well creditor discussions

Independent Oil and Gas plc ("IOG" or the "Company"), the development and production focused Oil and Gas Company, is pleased to announce that discussions with the creditors for the remaining liabilities relating to the 2016 Skipper well have concluded. The details are as follows: -

· A total of £6.78m was due to be settled by 20 December 2017.

· £4.47m has been deferred with final payments due either by the end of August 2018 or Field Development Plan Approval for the Company's SNS developments, whichever occurs first.

o Interest will accrue at LIBOR + 9%.

o The Company may repay early without penalty.

· £1.87m of the above total due has been converted into new ordinary shares in IOG at a price of 19p as detailed below.

· The remaining cash element of the settlement will be paid from existing facilities.

· All agreements are commercially settled, final documentation will be finalised shortly.

Conversion into Shares

· Baker Hughes, a GE company ("BHGE"), has agreed to convert £1.75m of the Skipper debt, plus a fee of £0.1m for the foregone interest from conversion, into 9,736,842 new ordinary shares in IOG.

· If BHGE wish to sell these shares they may only do so in an orderly market. This is agreed to mean a maximum of one quarter of the total number of shares issued in each quarterly period in 2018.

· In the event the shares are sold at an average price above 19p, any excess proceeds will be used to pay down any outstanding amount to BHGE or otherwise paid to IOG. If the shares are sold for less than £1.85m, IOG will make up the shortfall through the issue of new shares or with cash.

· Should BHGE retain shares under this agreement the price used to calculate any excess or shortfall will be the closing price on 31 December 2018.

· Another creditor has also agreed to convert an outstanding debt of £124,320. Including a negotiated conversion fee, the Company has agreed to issue 742,418 new shares to this creditor.

· The orderly market restrictions in this case limit any share sales to one third each month over the first quarter of 2018.

· Should this creditor retain shares under this agreement the price used to calculate any excess or shortfall will be the closing price on 31 March 2018.

The Company has applied to the London Stock Exchange for admission of the New Ordinary Shares to trading on AIM ('Admission'). Admission is expected to occur on 29 December 2017 subject to execution of final documentation. Following Admission there will be 120,209,629 Ordinary Shares in issue. Accordingly, this number may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in the Company under the FCA's Disclosure and Transparency Rules. 

Mark Routh, CEO and Interim Chairman of IOG commented:

"The Company is pleased to have successfully concluded creditor discussions and is very appreciative of the support from the service sector both in enabling the drilling of the Skipper appraisal well in August 2016 and in terms of extending deferrals or equity conversion. This resolution enables us to maintain a firm focus on our ongoing Southern North Sea development contracting and funding processes. We look forward to securing Field Development Plan approvals in 2018 to keep us on track for significant gas production in 2019. We are grateful for the continued support from our financial backers London Oil & Gas in providing the funds from existing facilities to manage these historic debts."

-ENDS-

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

Enquiries:

Notes

About Independent Oil and Gas:

IOG owns substantial low risk, high value gas Reserves in the UK Southern North Sea. The Company is targeting a 2P peak production rate in excess of 200 MMcfd (c. 35,000 Boe/d) from its substantial current portfolio via an efficient hub strategy. Alongside this it continues to pursue value accretive acquisitions, to generate significant shareholder returns. All IOG's Licences are owned 100% and operated by IOG.

Further information can be found on www.independentoilandgas.com