Sector News

Former First Oil boss in running for Iona Energy

February 23, 2017

Administrators yesterday revealed the identity of the frontrunner for the acquisition of now-defunct Iona Energy.

FTI Consulting said Decipher Energy had entered into a conditional sale and purchase agreement (SPA) for Iona, which holds 75% of the Orlando and Kells licences in the North Sea.

Decipher, a little-known independent oil and gas company established in 2016, will pay an initial $1 for Iona, though the final sticker price is considerably higher.

Previously, Bridge Petroleum had an SPA in place to buy Iona, but it had to pull the plug on the deal in November when its funding fell through.

According to Companies House, directors at London-registered Decipher include Steve Bowyer, who used to be managing director of Aberdeen-based First Oil.

First Oil, which had been controlled by multimillionaire businessman Ian Suttie, was placed in voluntary administration last year.

As well as the $1 consideration for Iona’s shares, Decipher will also fund $2million worth of reimbursements to Iona’s unsecured creditors on completion of the SPA.

Just over $1.5million will need to be stumped up for the repayment of outstanding bonds, while participants in Iona’s management incentive plan are due $500,000.

But before the SPA is completed, the parties involved want the Oil and Gas Authority to confirm that it will not terminate the Orlando and Kells licences as a result of the acquisition.

They also intend to ask for an amendment of the current bond agreement and a reduction in the amount outstanding under the bonds.

Administrators Chad Griffin and Lisa Rickleton said the Decipher deal was “the best option available in the circumstances to maximise recoveries to bondholders and other stakeholders in the company”.

The operatorship of Orlando and Kells was handed over to Faroe-based Atlantic Petroleum in December.

Atlantic holds 25% of the assets.

By Mark Lammey

Source: Energy Voice

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