UK-based gas company IOG plc has raised gross proceeds of £8.5 million through a placing and subscription and will use the proceeds to extend the Noble Hans Deul jack-up rig contract.
The company has placed 33,800,000 new Ordinary Shares at a price of 25 pence per New Ordinary Share (the "Issue Price") with existing and new investors. Certain directors and Persons Discharging Managerial Responsibilities have entered into direct subscription agreements with the company to subscribe for in aggregate 200,000 subscription shares at the issue price raising gross proceeds of approximately £50,000.
IOG is focused on developing its Southern North Sea gas fields at the Saturn Banks Project.
The company in June installed the Blythe and Southwark gas platforms at their respective offshore field locations in the UK.
Located in the southern North Sea, the two usually unmanned, remotely controlled platforms are part of IOG's Saturn Bank project which comprises gas resources across six discovered UK Southern North Sea gas fields. Saturn Bank Phase 1 focuses on the development of Blythe, Elgood, and Southwark fields.
First gas from Phase 1 is expected in the fourth quarter of 2021 on completion of the Blythe well drilling, spudded by the Noble Hans Deul jack-up rig earlier in August, and onshore recommissioning activities. The well is expected to take under three months to complete. The Elgood well was drilled earlier this year.
Commenting on the fundraise on Thursday, 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."
"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."