UK Shale Firm IGas Seeks Refinancing
UK onshore producer and shale gas explorer IGas Energy said March 10 that, in addition to a likely up-to-$35mn investment by private equity fund Kerogen Capital announced last week, it will now seek to raise a further up-to-$30mn from existing shareholders in an open offer at £0.045p/share.
This would help reduce IGas’s net debt from $120mn to not more than $20mn, it noted. Existing IGas shares on March 10 were trading at about £0.059, having peaked at £1.48 in January 2014.
IGas needs to sort out its liquidity by end-March, or risk a default on some bonds. Last October one bond-holder, New York based KKR, reportedly put pressure on IGas to sell its best-producing UK conventional assets to KKR. That could have undermined IGas’s balance sheet in the longer run.
In contrast Hong Kong and London-based Kerogen, which has funding from Chinese state CNOOC and others, has been supportive of firms active in unconventional gas exploration. Kerogen has equity in both Cuadrilla, a UK shale gas explorer, and its parent Australian drilling contractor AJ Lucas.
IGas CEO Stephen Bowler (photo credit: the company)
IGas CEO Stephen Bowler said March 10: "Further to the announcement last week of the potential $35mn equity investment by Kerogen Capital, we are pleased to announce the proposed revised bond terms and support from our bondholders.” IGas said two-thirds of its secured bondholders had indicated support for the Kerogen offer, as well as 40% of the unsecured bondholders.
France’s Engie this week announced it has quit UK shale gas exploration. In contrast, IGas now has final consent to drill at one site in north Nottinghamshire (English Midlands) and a planning hearing set for March 21 for its second application nearby; no hydraulic fracturing has been requested by IGas at either site at this stage.
Cuadrilla meanwhile has secured an injunction until August 2018 to prevent protesters going on to a farmer’s field at its Little Plumpton shale drilling site in northwest England, reported the Blackpool Gazette March 8. This followed a reported trespass on February 25.
Mark Smedley