IGas Energy confirms lending facility headroom

IGas Energy updated the market following its reserve-based lending facility (RBL) semi-annual recalculation on Monday.

The AIM-traded firm said the redetermination exercise confirmed $31.7m (£24m) of debt capacity, and current headroom of $11.7m (£8.9m).

As at 30 November, cash balances stood at $2.8m, with net debt of $17.2m.

The company said it had hedged 370,000 barrels for 2021 at an average floor price of $44 per barrel, using a mixture of swaps and collars.

“In spite of the continued pressures on the business, as a result of Covid-19, average net production for the year to 31 December 2020 is within the 1,850 to 2,050 barrels of oil equivalent per day range,” said chief executive officer Stephen Bowler.

“Having completed a review of iGas’ assets, I am excited about the various energy transition opportunities that we have identified.

“Our partnership with BayoTech will allow us to advance hydrogen production opportunities, increasing the value of the gas we produce whilst pioneering the use of small scale steam methane reformation equipment in the UK.”

Bowler added that the company’s land portfolio was “well-suited” to the development of renewable and hybrid flexible power generation, adding that its assets had the potential for carbon storage at scale in locations close to emitters.

“The government's recently-published Energy White Paper makes a commitment to repurposing - ‘ we will provide opportunities for oil and gas companies to repurpose their operations away from unabated fossil fuels to abatement technologies such as carbon capture, utilisation and storage or clean energy production such as renewables and hydrogen’.

“The British Geological Survey recently estimated that geothermal energy resources in the UK are sufficient to deliver about 100 years of heat supply for the entire UK.

“The publication of the UK Government's Ten Point Plan and Energy White Paper provides for significant opportunity for our geothermal business in the decarbonisation of large-scale heat and we look forward to responding to the Green Heat Network Fund consultation.”

At 1312 GMT, shares in iGas Energy were up 4.63% at 14.7p.