Share Prices & Company Research

Market News

26 Jul 2019 | 08:03

Independent Oil and Gas to farm out 50% of Southern North Sea assets to CalEnergy Resource for £40m

Independent Oil and Gas said it had struck an agreement with CalEnergy Resource to farm out 50% of the company's Southern North Sea assets for an initial payment of £40m in cash. Under the terms of the deal, CalEnergy Resource (CER) would pay £40m on completion of the farm-out and up to £125m of the company's development costs, representing 80% of IOG's 50% share of core project costs, up to caps of £60m for Phase 1 and £65m for Phase 2 respectively. The core project comprised 410 BCF of 2P+2C reserves and resources across six discovered Southern North Sea gas fields. IOG also agreed to pay CER a royalty of 20.2% of its net revenues from the Phase 1 fields only, up to a cap of £91m over field life. IOG would also receive an effective royalty interest equating to £0.50 per MCF on CER's 50% share of production from certain sections of the Goddard Field after 70 BCF gross had been produced from the field up to a maximum royalty of £9.75m, the company added. As well as the the Farm-out agreement, IOG and CER signed an agreement to allow for future co-operation in further Southern North Sea business development activities on a 50:50 basis.

At 8:03am: (LON:IOG) Independent Oil Gas PLC share price was +9p at 25p

Story provided by StockMarketWire.com
Get in touch today
Join Redmayne Bentley
Talk to us now about opening a new account or transferring your account from another provider
0113 243 6941
Get in touch today
Contact your local office
Contact your local office to find out more
The value of your investments and the income from them may go down as well as up, and you could get back less than you invested.
We use cookies on this site to improve your experience and help us provide you with a better website. An explanation of the cookies we use and their purpose can be found within our Cookie Policy. Your continued use of this site means you consent to the use of cookies.