finnCap Research Company Notes - 4 January 2019

Jan 04, 2019 / News

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Sector: Energy

Independent Oil & Gas (IOG) : Corp

Financing concerns overdone

Key data                              

  • Share price (p)                  14.6
  • Target price (p)                72.0
  • Market cap (£m)                              18.5
  • Enterprise value (£m)                    42.4

IOG’s shares were down 24% yesterday after a company which lends to its main creditor was highlighted as being investigated by the FCA in relation to marketing materials for its Fixed Rate ISA / Bond. IOG’s creditors have confirmed that the financing facility in place is unaffected; worst-case scenario looks to us to be that £7.85m of yet-to-draw funds may be at risk. Given the strength and quality of IOG’s assets, other sources of financing should be available if necessary. Market, sector and stock specific issues have seen the shares fall nearly 50% in little more than a month, leaving them trading at an 80% discount to our 72p risked-NAV. However, IOGs Southern North Sea gas assets have lost none of their lustre. With M&A making a resurgence in the sector, IOG likely starts to appear on the radar if this level of mispricing continues.

Jonathan Wright |

finnCap operates an ‘access-for-all’ approach for corporate research, approved by the FCA and paid for by finnCap’s corporate clients.


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