Update on bond discussions
16 June 2023
Update on bond discussions
IOG plc ("IOG", or "the Company"), (AIM: IOG.L) provides an update on its discussions with a group of investors ("the ad-hoc group") in its €100 million senior secured bond ("the Bond")
As disclosed on 7 June, recognising the increased pressure on the Company from operational and market developments over recent months, management has been proactively taking mitigating actions to protect the Company's balance sheet and initiated discussions with the ad-hoc group designed to pre-emptively address potential near-term covenant breaches and the longer-term bond maturity. Since that date, the bondholder group has grown to encompass more than 50% of the Bond.
A primary objective for the Company is to ensure a period of stability to continue to work in the best interests of its stakeholders. In that context, the company remains in constructive dialogue with the ad-hoc group, including regarding a potential deferral of the interest payment due 20th June for a short period of time. Since the record date for the coupon payment is 16th June (today), the Issuer has asked the Paying Agent to postpone the interest payment date in the central securities depository (CSD) for technical reasons. This postponement does not constitute a change in the due date but is made contingent on approval by a requisite majority of the bondholders in a formal bondholder resolution. The money will remain in the Debt Service Reserve Account and a further announcement on this is expected shortly.
Rupert Newall, CEO, commented:
"We appreciate the constructive dialogue held to date with key bondholders and believe that our mutual interests are well aligned to work through current challenges. We will continue to engage proactively with them to unlock the significant value in our portfolio for the benefit of all stakeholders.
In parallel, we have been producing steadily from the Blythe H2 well at around 20 mmscf/d since Monday and after an initial period of water being swept from the pipeline due to the increased flowrate we are now seeing much smaller quantities of water arriving at Bacton. We are in advanced preparations for the upcoming wireline intervention which will allow us to investigate and potentially remediate the apparent downhole restriction. While the gas market remains extremely volatile, we are also encouraged by its substantial recovery in the past two weeks."
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR.
Rupert Newall (CEO)
James Chance (Head of Capital Markets & ESG)
+44 (0) 20 7036 1400
Christopher Raggett / Simon Hicks
+44 (0) 20 7220 0500
Peel Hunt LLP
Richard Crichton / David McKeown
+44 (0) 20 7418 8900
Patrick d'Ancona / Finlay Thomson
+44 (0) 20 7390 0230
IOG is a UK developer and producer of indigenous offshore gas. The Company began producing gas in March 2022 via its offshore and onshore Saturn Banks production infrastructure. In addition to its production assets, IOG operates several UK Southern North Sea licences containing gas discoveries and prospects which, subject to future investment decisions, may be commercialised through the Saturn Banks infrastructure. All its assets are co-owned 50:50 with its joint venture partner CalEnergy Resources (UK) Limited. Further details of its portfolio can be found at www.iog.co.uk.