7th Mar 2014 10:36
LONDON (Alliance News) - Shares in Independent Oil & Gas PLC surged 26% Friday, after it said it has received approval to get a USD50 million reserve-based debt facility from a "substantial" US lender, money it needs to develop its Blythe field in the North Sea.
The North Sea focused oil and gas company said that a "substantial US financial institution" has confirmed credit committee approval to provide its subsidiary IOG North Sea Ltd, with a USD50 million senior secured borrowing base facility.
It said the debt provider is an established specialist lender to several oil and gas businesses, including companies operating in the North Sea.
The company said that USD25 million of the facility is expected to be available for the Blythe field development, upon certain conditions, including the approval of a field development plan, the execution of an agreed hedging programme, as well as standard security arrangements.
Independent Oil & Gas is a 50% co-owner of the Blythe field with Alpha Petroleum Resurces Ltd.
Earlier this week, Independent Oil & Gas saw its share price rise on the news that it is buying UK licence block 48/22a in the North Sea, which contains a gas discovery that will be renamed Cronx. The block is 14 kilometres north-west of the Blythe field.
Independent Oil & Gas said Monday it has extended its Blythe and Skipper licences for 18 months.
IOG said Friday that the facility is expected to have a tenor of five years and is subject to the entry into definitive documentation, which the company expects to be in place by late-March.
"This is another important milestone in the Blythe field development but also this facility gives us great flexibility with regards to potential acquisitions and other developments such as the nearby Cronx gas discovery. We are working towards submitting the Blythe Field Development Plan by the third quarter of this year, targeting first gas by the end of next year," said Chief Executive Officer Mark Routh in a statement.
Routh said the group is also planning to drill appraisal wells on Skipper this coming summer and on Cronx before the end of the year.
"We are actively reviewing other potential acquisitions and developments, including applications in the current 28th Licensing Round," he added.
Shares in IOG surged 26% Friday morning to 44.72 pence, the second-biggest rise on AIM.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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