Independent Oil & Gas signs well management contract

Shares in exploration tiddler Independent Oil and Gas gushed higher as it signed off on a deal to drill its Skipper well in the North Sea.

AIM-listed IOG, which earlier in the week secured funds for the drilling, confirmed it had finalised a contract with AGR Well Management for the drilling of an appraisal well that is expected to begin in late January or early February 2016, with a rig contract still to be arranged.

AGR has agreed to accept a mixture of IOG shares and cash for the contract, with an initial payment of £657,220 that may be satisfied either in cash or by the issue of new ordinary shares at an issue price equal to the volume weighted average of the price of the ordinary shares for the calendar month prior to issue, to be chosen by IOG.

Chief executive Mark Routh said IOG was "working hard to finalise the rig contract in the near term".

The company suffered from funding difficulties earlier this year as potential partners took fright as the oil price continued to slump.

On Thursday, the company's shares were up 12% to 7.56p just before the close, not far from their recent seven-week highs.