The Department of Energy and Climate Change has extended Independent Oil & Gas’ Cronx license in the North Sea by a full 12 months to Dec. 31, 2015, according to a press release. The sale and purchase agreement has also been amended to allow completion of the acquisition by June 30, 2015.
It remains Independent’s intention to complete the acquisition and to meet the license commitments by drilling a well as soon as possible thereafter. These plans remain subject to financing, however as previously announced, IOG has signed an memorandum of understanding with AGR Well Management Ltd. to deliver the Cronx well. The term sheet agreed with BP Gas Marketing Ltd. for a secured bridging loan to partly fund the commitment well will expire on Dec. 31, 2014, but Independent is currently in discussions to extend this date or pursue alternative financing options.
The base case recovery estimate for Cronx is 487 Mcm (17.2 Bcf), based on the Competent Person’s Report by ERC Equipoise.
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