14th Jun 2016 09:16
LONDON (Alliance News) - IGas Energy PLC on Tuesday said it is in discussions with a number of potential investors and continues to evaluate options for cash and earnings accretive transactions, including farm-outs and other asset portfolio management opportunities.
The hydrocarbon producer has been seeking to strengthen its balance sheet over the past year during a period of "prolonged oil price volatility", through discussions with bondholders with a view to extending the maturity of debt, deferring certain interest payments and waiving some financial covenants on the basis that further finance comes into the business.
IGas is now in discussions with potential investors which it said are intended to "achieve a capital structure that is sustainable in the current oil price environment", as well as enable the company to capitalise on value accretive opportunities such as water injection, oil behind pipe, gas monetisation and infill drilling.
IGas hopes these measures will increase production by 700 barrels of oil equivalent per day, net of decline, by January 2018. Production guidance for the current year remains at between 2,500 and 2,700 boepd.
IGas added that it is making good progress on its five-year share development plan, with two wells expected to spud in the first half of 2017.
"The company is monitoring its bond covenants, in particular ratios based on cash and leverage, which continue to be impacted by the prevailing oil price and current currency volatility. The company will update the market in due course as discussions progress," IGas said in a statement.
Shares in IGas were trading down 7.9% at 15.43 pence on Tuesday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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