Independent Oil and Gas (IOG)secured the final £4.75million needed for its North Sea Skipper well.
IOG struck a deal with GE Oil & Gas and London Oil & Gas for the remaining funds alongside agreeing a string of repayment deferrals for existing loan agreements.
GE will loan £2million and London has fronted £2.75million.
IOG chief executive Mark Routh said: “We are delighted to have secured this loan funding along with very significant contractor deferrals, demonstrating 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.”
A company spokesperson added: “An agreement with a major service contractor has now been executed with significant deferral.
“Now that the Loan Agreements are in place, the Company is well placed to conclude contract negotiations on the Skipper rig and an announcement will be made in due course.”
Skipper has independently verified gross 2C resources of 26.2 MMBbls. IOG management estimates that the recoverable oil from Skipper is 34.1 MMBbls based on a recovery factor of 25%, compared to the historic CPR estimate of 19%. Successful flow tests from nearby heavy oil fields substantiate the company’s estimate of a 25% recovery factor. The appraisal well will also target two exploration prospects directly beneath the Skipper oil discovery which may contain oil in place of 46 MMBbls, according to the firm.