IOG agrees Skipper well funding and defers contractor payments

Independent Oil & Gas reassured investors that it has secured of funding to drill its Skipper appraisal well by February at the latest.

Having suffered from funding difficulties earlier this year as potential partners got the willies due to the oil price slump, the North Sea-focused explorer was pleased to have secured up to £4.75m of loans from GE's UK oil and gas arm and London Group.

Of this total, £4.5m of the well funding will be deferred until December 2016, the point to which a $2m loan from Weatherford Technical Services has been extended.

IOG has agreed to grant warrants for 5.78m shares exercisable at a price of 11.9p at any time until December 2016 and granted the two lenders a fixed and floating charge over the company and the assets of its IOG North Sea subsidiary as security for repayment of the loans.

The AIM-listed company has also agreed a deal to secure a drilling rig to access Skipper and conduct "well management", with the payment of £657,220 in either cash or new shares.

IOG chief executive Mark Routh said the contractor deferrals were "very significant" and demonstrated the industry's support for the Skipper project.

"Subject to completion of certain contracts we are now fully funded to drill this transformational well early in 2016 and look forward to reverting with the final details shortly."

Analysts at FinnCap agreed the funding of Skipper was "very good news".