IOG, Ping to jointly bid for UKCS producing assets
Independent Oil and Gas plc, the North Sea focused Oil and Gas company, has signed a Memorandum of Understanding with Ping Petroleum (Bermuda) Limited to work together on the UKCS.
The two companies have agreed to jointly evaluate and bid for producing assets in the UK Continental Shelf. Ping is a private independent exploration and production company based in SE Asia.
A key element of IOG’s strategy is to acquire producing assets either as an operator or non-operator. IOG says that the Ping senior management team are well known to IOG from their time at Newfield Exploration and the companies have shared aims with regards to acquiring such assets.
IOG and Ping have already evaluated several such properties and the MOU sets out the basis for ongoing collaboration. IOG says that its team has great experience of maximising revenues from mature producing assets and Ping has complementary experience from the Gulf of Mexico and South East Asia.
IOG has plans to drill wells on both its Cronx and Skipper assets next summer, subject to funding. The costs of these wells would generate significant capital allowances that could be offset against production revenues from acquired assets.
IOG has already started work in conjunction with Ping to assess a number of potential acquisition opportunities. Such acquisitions should significantly reduce the amount of additional funding required. One joint bid already made by IOG and Ping had backing by a large institution to debt fund IOG’s share and if successful may not require any additional equity funding.
Mark Routh, CEO of IOG said:
“We are delighted to have agreed the MOU with Ping and look forward to working with Ping’s team with the aim of delivering the acquisition of one or more producing assets, revenues from which will reduce our capital needs, maximise tax efficiency and minimise shareholder dilution. I personally worked closely with Roy Phillips, the Chairman of Ping whilst at CH4 Energy when Roy was the Managing Director of Newfield UK and we are very impressed with the team he has at Ping.”
“We will keep shareholders abreast of developments with this strategy as they occur and also look forward to providing a further update with the publication of our interim statement scheduled for 30th September 2014.”