North Sea E&P Independent Oil & Gas (IOG:AIM) has less than a month’s worth of funding left and a long-term financing deal with a multi-billion dollar cap company has gone up in smoke amid a renewed downturn in commodity prices. The shares are in free-fall – down 61.7% to 4.5p.

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The company announced late Friday (7 Aug) that its potential partner had walked away from a deal which included a $10 million equity investment at 23.79p and attractively priced debt facilities up to a total of $480 million in two tranches. This would have been sufficient to fund the whole development portfolio to first production.

The company says it is pursuing other options with the immediate priority being to commence a commitment well on its Skipper discovery. Licence P1609 – which contains Skipper - is set to expire by 30 September and in order to secure an extension Independent is likely to have to demonstrate it can drill by mid-2016 at the latest. Funds are also need to close the acquisition of 50% of Skipper from its partner Alpha Petroleum.

Independent is funded up to 4 September, when a loan to Darwin of £358,000 is repayable, so management will need to move fast.

Issue Date: 10 Aug 2015