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EUR100 million bond issue

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE UNITED STATES, CANADA OR JAPAN.
 
Independent Oil and Gas plc ("IOG" or the "Company"), the development and production company focused on becoming a substantial UK gas producer, is pleased to confirm the successful arrangement of a EUR100 million 5-year senior secured bond issuance (“Bond”).
 
Proceeds of the Bond will be used to fund capital expenditure on IOG’s gas development project in the UK Southern North Sea (“Core Project”), financing costs and general corporate purposes. It has a bullet repayment structure and an interest rate, payable quarterly, of 9.5 per cent per annum over the three month Euribor rate (with a floor of zero when this rate is negative as it is currently). It is callable after 3 years with an initial call premium of 50% of the coupon (i.e. repayable at a cost of EUR104.75 million if 3m Euribor is at zero or lower), declining by 10% every six months thereafter.
 
The Company has the option, subject to certain conditions and investor commitments, to issue additional amounts up to a maximum aggregate of EUR30 million (“Tap Issues”). Tap Issues carry identical terms to the initial EUR100 million issue but may be issued at different prices.
 
Settlement date of the Bond will be 20 September 2019, giving an expected maturity of 20 September 2024. Application will be made to list the Bonds on the Oslo Børs.
 
This Bond commitment fulfils a major condition for completion of the farm-out transaction announced on 26 July 2019 (“Farm-out”). The remaining Farm-out conditions are expected to be finalised in the near future, leading directly to Farm-out completion and Phase 1 Final Investment Decision (“FID”).
 
The Bond was marketed to institutional investors across the Nordics, UK, Europe and Asia. ABG Sundal Collier ASA acted as Sole Manager.
 
Andrew Hockey, CEO of IOG commented:

This Bond is a very significant step forward for IOG, fulfilling the key condition to Farm-out completion. Raising EUR100 million in debt finance demonstrates the robustness of our Core Project in the UK Southern North Sea, for which we will be fully funded at Farm-out completion. Farm-out completion will trigger Phase 1 FID which will be a major milestone for IOG, signalling the start of the project execution phase.


For more information please contact:
 
Independent Oil & Gas PLC
Andrew Hockey (CEO)
James Chance (CFO)
Rupert Newall (Head of Corporate Finance)
+44 (0) 20 3879 0510
finnCap Ltd
Christopher Raggett, Simon Hicks (Corporate Finance)
Camille Gochez (Corporate Broking)
 
+44 (0) 20 7220 0500
Peel Hunt LLP
Richard Crichton
David McKeown
 
+44 (0) 20 7418 8900
Vigo Communications
Patrick d’Ancona
Chris McMahon
Simon Woods
+44 (0) 20 7390 0230
 
About Independent Oil and Gas:
Subject to completion of the farm-out transaction announced on 26 July 2019, IOG will own and operate a 50% stake in substantial low risk, high value gas reserves in the UK Southern North Sea. The Company’s Core Project targets a gross 2P peak production rate of 146 MMCF/d (c. 25,000 Boe/d) from gross 2P gas Reserves of 302 BCF² + 2C gas Contingent Resources of 108 BCF³, via an efficient hub strategy. In addition to the independently verified 2P reserves at Blythe, Elgood, Southwark, Nailsworth and Elland and 2C Contingent Resources at Goddard, IOG also has independently verified best estimate gross unrisked prospective gas resources of 73 BCF³ at Goddard and management estimated best estimate gross unrisked prospective gas resources of 129 BCF¹ at Harvey. Alongside this IOG continues to pursue value accretive acquisitions to generate significant shareholder returns.
 
¹Updated management estimates based on interpretation and mapping of 3D seismic data reprocessed to Pre-Stack Depth Migration (PSDM) in 2018, subsequent to ERC Equipoise's 2017 Competent Persons Report
²ERC Equipoise Competent Persons Report: October 2017, adjusted by Management to account for updated project timing and compression

³ERC Equipoise Goddard Competent Persons Report: October 2018

 
Certain information communicated in this announcement was, prior to its publication, inside information for the purposes of Article 7 of Regulation 596/2014.
 
This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America.  This announcement is not an offer of securities for sale into the United States.  The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration.  No public offering of securities is being made in the United States.