IGas to issue new bonds of US$165mlnFriday, March 15th, 2013
UK oil and gas firm IGas (LON:IGAS) is to raise US$165mln through a bond issue.
The bonds will carry 10% interest and will be listed in Oslo.
The AIM quoted firm, which has production in the order of 3,000 barrels per day, says the purpose of the funding is to refinance existing debt and also for general corporate purposes.
IGas has a solid production base coming from conventional oil and gas operations, and it is one of the early movers in Britain’s unconventional hydrocarbons industry.
It has an extensive coal bed methane portfolio, and it is one of just a few companies with a proven shale gas discovery in the UK.
This discovery in Cheshire, found within the Bowland shale play, has been a focus for investors in recent weeks following the British government’s decision to allow fracking – a controversial technique that is essential to the exploitation of shale hydrocarbons.
And a recent equity fund raise, of £23mln, in January has strengthened its hand in farm out negotiations, according to City broker Canaccord Genuity.
The broker highlighted that the money would allow for drilling later this year so that the play can be assessed further and the strategy can be better defined.