UK IOG 'Safe from Administration of Funder'

UK explorer Independent Oil & Gas (IOG) said March 19 it was safe from the administration of a major backer London Oil & Gas (LOG), some of whose administrators are also joint administrators of London Capital and Finance (LCF), which is a lender to LOG.

IOG said it understood that "the administration of LOG will preserve the significant value of LOG's key assets, being its financial interests in natural resources company, Independent Oil & Gas" and that "IOG is not adversely affected by the administration of LOG" and that "IOG continues to trade normally".

A third-party evaluation of IOG's assets has convinced the administrators that IOG is a key asset for LCF and its underlying bondholders and they have concluded that they will achieve the best return for such bondholders by continuing to support IOG, said IOG's statement. That means the term of the loan remains unchanged and no event of default will be triggered as a result of LOG's administration, said IOG.

As IOG said February 25, it continues to "progress negotiations with a shortlist of well-funded farm-in partners and is well advanced with financing plans which are unrelated to and unaffected by LOG's administration. The administrators have confirmed to the board that they will support such plans."

IOG CEO Andrew Hockey said this support will "help us to proceed to final investment decision on our core project. The additional third party validation is further proof of the considerable value of the IOG portfolio which we look forward to unlocking very soon." In January, he said he expected IOG to take FID this quarter, following a gas discovery boosting the value of its core area in the southern basin. 

Another small UK explorer. RockRose, scented blood when LCF went into receivership late January, and said earlier this month that a merger with RockRose would allow IOG shareholders to capture certain value in the near term, while waiting could lead to a less desirable outcome. IOG rejected the bid.