As a relatively recent investor in IOG, I thought I would write up some of my research whilst waiting for that update about first gas. From the website "IOG is focussed on the Southern North Sea (SNS) with a fully-funded Saturn Banks Project consisting of a 50% operated stake in six proven gas discoveries plus the Saturn Banks Pipeline and onshore Saturn Banks Reception Facilities at the Bacton Gas Terminal." Bacton is in Norfolk and we own both the facilities there and a concrete pipeline to get there. We farmed out most of the other 50% to an Australian firm called CalEnergy in 2019 according to this article. They paid £40m upfront and will pay up to £125m in development costs. At the same time we launched a bond to raise aprox £70m.
At the end of Feb 2020 as the first incling of the potential for a pandemic arose CalEnergy declined to spend a further £20m buying half of our stake in the Harvey and Redwell licences according to this article. At this point, the price per therm of gas was much lower. Many of the plans were probably made with an expectation of around 35-45p per therm. The price has recently been wildly moving about and is currently 188p per therm for March 2022 delivery.
IOG has a marcap of £187m with notable shareholders including:
London Oil and Gas Limited (In administration) with aprox 27.87% of the shares. Last TR-1
Lombard Odier have 17.99% at last update in Oct 2021 Last TR-1
Premier Miton have 10.53% as of Sep 2021 Last TR-1
Azvalor Asset Management, a Spanish companny have 2.81% as of Apr 2021 Last TR-1
Richard Grifiths and controlled undertakings have 6.25% as of Jan 2020 Last TR-1
Burggraben Holding AG of Switzerland have 2.95% as of Jan 2020 Last TR-1
There were some TR-1's from Spreadex in 2019 but as the most recent was under 3% they wouldn't have to update again and may be long gone.
Adding those up above they come to 68.4%. Each of them has been selling some shares as the price has gone up (some too early) Premier Miton have been building their stake to Sep 2021 and so probably paid less than 30p a share. From memory I believe London Oil and Gas have an option to buy more shares in the low 20's. They will no doubt execute these when they release some cash in the coming months and potentially years as IOG sells its gas. As a firm in adminstration I'd be interested to know what control they have over the timescale of winding up the company's assets. No doubt the creditors will have some input on this; but I think it's fair to say that we will have all of London Oil and Gas's shares back on the market in the short to medium term. I believe they were one of the early backers of this project and hope that they will recoup their orignal investment with some profit.
There are a couple of other shareholdings listed on the IOG website (Chelverton and Stonehage Fleming). As the largest holder information seems up to date the whole page probably is.
Directors hold about 1% or £1.87m which is a good sign. Rupert Newall, the CFO holding the lions share of £1.36m
There's a good update presentation from December 2021 here
So in conclusion we know who owns 70% of the shares, we know that CalEnergy bought into about half of the project in a farm out. We know that first gas is due to be delivered this month. What we don't know is what those other 30% of the shares will be selling for next month. I look forward to hearing about the flow rates that we get as we open up the taps. One things for sure; if we can sell our gas for 188p per therm in March that's just over 4 times the planning price of 45p per therm. As such, each week should bring us a month of revenue against the old plans. Yes there have been some delays, and as we turn on the taps we won't be getting quite as much gas as we had planned on originally, but waiting a few more weeks and we should be up to speed.
Please don't take this as investment advice. I own shares in IOG. The price of gas may go down as well as up. Nord Stream 2 may get signed off in the coming weeks by the EU decimating the price of gas. Gas may be liquefied from parts of the world where it's much cheaper and shipped across to Europe to keep us warm. The beast from the east may not arrive this year and fusion may power more kettles soon. A populist windfall tax may be launched to save big dog's bacon to add to the already progressive Petroleum Revenue Tax
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