IOG, formerly Independent Oil and Gas, has raised more than £8 million after it completed an “oversubscribed” fundraiser.
The cash will allow the UK energy company to trigger an “attractive extension option” for use of the Noble Hans Deul rig for a “dual-lateral well” next year.
That will allow for the appraisal Kelham North and Kelham Central prospects.
A total of 33,800,000 new ordinary shared were placed with existing and new investors at a price of 25p per new ordinary share.
As a result, IOG successfully hit the £8.5m target it had set out to raise.
The new ordinary shares will represent 6.5% of the company’s enlarged issued share capital.
Andrew Hockey, IOG CEO, said: “I am very pleased to have completed this oversubscribed Fundraise which has been strongly supported by both existing and new institutional investors, and in which myself and several other directors and senior management have also invested. As we approach first gas in Q4 2021, we are already looking to drive accretive new growth beyond.
“This Fundraise enables us to exercise an attractive extension option for the Noble Hans Deul rig for a dual-lateral well in 2022 to appraise both the Kelham North and Kelham Central prospects on the 30th Round Licence P2442 (Block 53/1b) and prove up a high-return incremental Southern Hub to be tied back directly into our Saturn Banks infrastructure. Our seismic reprocessing has demonstrated potential for up to six assets in this hub, which lies in a historically prolific producing area of the Southern North Sea.
The Kelham North and Kelham Central well is planned to follow a Goddard appraisal well in licence P2438 (Blocks 48/11c and 12b), to be financed out of existing resources and drilled directly after the first two Southwark production wells, enabling the Company to benefit from significant drilling efficiencies. The Goddard appraisal well will evaluate the upside potential to the south-east of the structure potentially enabling a much higher return development.”
It comes at an important time for IOG, with first gas expected from its Saturn Banks project before the end of the year.
Development drilling kicked off on April with the spudding of the Elgood well by the Noble Hans Deul jack-up rig, followed by Blythe in August – Southwark is due to be spudded in the near future.
Mr Hockley added: “The Fundraise will also enable us to commence seismic reprocessing on Licence P2589 (Blocks 49/21e and 22b, Panther and Grafton) where we are targeting a similar uplift in commercial potential to P2442.
“IOG has a clear strategy to deliver further high-return projects as a Net Zero UK gas and infrastructure operator. With the right team and partnerships in place, this multi-phase “project factory” can generate substantial further shareholder value, while also helping to maximise low carbon intensity domestic UK gas supplies. I would like to thank our shareholders for continuing to support our exciting journey and look forward to updating further on progress on Phase 1 and beyond.”