Independent Oil & Gas clarifies position as FCA investigates LCF

Development and production company Independent Oil and Gas updated the market on its relationship with London Capital and Finance (LCF) on Friday, after the Financial Conduct Authority (FCA) launched an investigation into LCF.

The AIM-traded firm said there was no direct relationship between LCF and itself.

It reported that the FCA had required that LCF not - without the prior consent of the FCA) - deal in any way with its assets, and needed to cease conducting all regulated activity.

“Independent Oil & Gas wishes to clarify that LCF is not a shareholder in Independent’s primary financial backer, London Oil & Gas (LOG),” the Independent board said in its statement.

“LOG is a borrower from LCF and LOG is also a lender to IOG amongst other companies.”

Under the total of £38.55m loan facility agreements signed between Independent and LOG between December 2015 and September 2018, sums owed by IOG to LOG are only repayable within 36 months of their drawdown, and there was no mechanism under which LOG could demand early repayment save in an event of default by the company.

Independent said it had to date drawn a total of £30.7m under the LOG facilities, of which £0.7m was held in cash and £3.05m was due to be repaid in the next six months.

The firm said it currently had further availability under the LOG facilities of £7.85m.

LOG had reportedly re-confirmed to Independent on Friday that all sums agreed to be lent remained available, and LOG had not received any call on any of its funds from LCF.

“The company is monitoring the situation with regard to LCF and LOG carefully and continues to progress its current forward funding plans as per its 29 November 2018 announcement,” the board added.