IOG Issues Bonds For North Sea Work

IOG has issued €100mn ($110mn) in five-year bonds to cover the cost of its gas development programme in the southern UK North Sea.

The placed bonds carry an annual interest rate of 9.5% over a three-month Euribor rate, IOG said in a London stock exchange filing on September 9. They are callable after three years with an initial call premium of 50% of the coupon, declining by 10% every six months thereafter. IOG has an option to issue an additional €30mn in bonds, under the same terms but potentially at a different price.

The settlement date of the bonds is September 20.

“This bond is a very significant step forward for IOG, fulfilling the key condition to farm-out completion,” IOG CEO Andrey Hockey said.

IOG is developing six offshore discoveries estimated to hold 302bn ft³ of 2P gas reserves. It expects to flow 146mn ft³/day from these fields at peak capacity. Now the bonds have been arranged, IOG’s next step will be to complete the farm-out of these assets to US-based CalEnergy Resources (CER). It will then be ready to take a phase-one final investment decision (FID).