5th Nov 2014 13:02
LONDON (Alliance News) - Independent Oil and Gas PLC Wednesday said it has raised enough working capital through a placing to fund the company for at least the next six months, as it also announced its chairman has retired.
Following a brief statement on October 29, when Independent Oil confirmed it planned to raise additional capital, the company has now raised GBP450,000 through the issue of just over 4 million shares at 11.00 pence a share. The price paid represented a discount of 0.25 pence per share to the closing mid-price of Independent Oil shares on Tuesday, it said in a statement.
Independent Oil shares were down 1.3% to 11.10 pence per share Wednesday afternoon.
"We are pleased to have conducted this placing without overly diluting the shares or at too big a discount in a tricky market. We are pleased to be pushing forward," Chief Financial Officer Peter Young told Alliance News in a telephone interview.
Five of Independent Oil's directors are subscribing for GBP100,000 of the new shares in total, and the placing has taken their holding in the company to 41.4%, from 42.6%, between them.
CFO Young and non-executive directors Mike Jordan, Paul Murray and Marie-Louise Clayton purchased 181,818 shares each, whilst Mark Routh, chief executive, and now also interim chairman, purchased 181,821 shares.
Young has the largest holding of the five directors after the placing, with a 19.8% stake. Jordan now has an interest in 10%, whilst Routh has a 6.2% stake. Clayton has a 3.6% holding and Murray holds 1.4% of the issued capital in the company.
"The directors are completely aligned with shareholders, and we have the same objectives," Young told Alliance News.
"A large proportion of the wealth is in the company," added Routh.
Chairman Mehdi Varzi, meanwhile, has informed the company he is to retire with immediate effect in order to devote time to other interests. Routh will become interim executive chairman whilst the company considers its options.
Independent Oil plans to acquire producing assets to reduce the company's long-term funding requirements, funding the acquisitions substantially or entirely by debt, it said in regards to its ongoing financial predicament.
"We need to manage our overheads closely, and the main focus is to get a producing asset in. We are still in talks with Ping and talking about other potential opportunities in the North Sea, but it is too early to announce anything," Routh told Alliance News.
Late in September, the company said it had entered a memorandum of understanding with Malaysian company Ping Petroleum (Bermuda) Ltd to place joint bids for producing assets in the North Sea.
"We will continue to look at all options to funding and developing our discoveries with the aim of getting them into production as soon as we possibly can," said Routh.
On September 30, Independent Oil said it was expecting to discover if any of its three license applications for the UK's 28th licensing round will be awarded in the fourth-quarter, and are hoping the results could be revealed this week.
"We believe the results of the 28th licensing round are imminent. The Treasury is holding a talk on Friday and we think it will be concerning potential tax breaks for the North Sea," Routh told Alliance News.
"The next six months and the developments we make will be dependent on securing further funding," he added.
By Joshua Warner; [email protected]; @JoshAlliance
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