North Sea oil firm Independent Oil & Gas (IOG:AIM) is desperately trying to shore up its finances ahead of a deal to secure long-term funding for its Skipper, Cronx, Elgood and Blythe projects. The market is clearly concerned marking the shares down 13.3% to 18p.
On 22 June the group announced a third party had agreed to subscribe for 609,500 shares to raise £145,000 at 23.79p. This new capital apparently sufficient to fund Independent through to 4 September. Crucially it also took the £12.4 million cap up to a 15 August targeted completion date to conclude a transaction with 'a multi-billion dollar market capitalisation' company which can bankroll the development of its assets. The promise of this agreement had helped drive a re-rating of the shares.
Today it announces the £145,000 - due on 30 June - has yet to be received and raises £50,000 as management subscribe for shares. This modest cash injection is expected to cover expenses through to the end of July.
Chief executive Mark Routh is looking to repeat the success he enjoyed with a hub strategy executed at private equity-backed vehicle CH4 Energy, where fields near to existing and, ideally, owned infrastructure are developed. Founded in 2002 with £1 million of funding, CH4 was sold four years later for £154 million.
His ability to do so now looks dependent on there being no slippage on the 15 August deadline for the promised long-term financing deal.