A flash blog this morning, I’m headed to the Channel Islands for a family funeral

IOG

IOG has announced the following Board and executive changes.

After nearly five years in the role, Andrew Hockey has informed the Board of his intention to retire as CEO and step down from the Board with immediate effect. The Board of IOG recognises the significant contribution that Andrew has made over his tenure at the Company. Andrew has agreed to remain with IOG as an advisor to the Board in order to leverage his deep Southern North Sea (SNS) geological, commercial and regulatory expertise in particular to support IOG’s participation in the recently announced 33rd UK Offshore Licensing Round.

The Board is pleased to confirm that Rupert Newall will step up to become the new CEO. Having led its restructuring and farm-out to CalEnergy Resources (UK) Limited (CER) in 2019, and then joined as CFO, Rupert has played an instrumental role in IOG’s progress to becoming a UK gas producer.

In addition, David Gibson will step down as Chief Operating Officer (COO) with immediate effect.

The Board is pleased to announce the appointment of Dougie Scott as the Company’s new COO. It is intended that Dougie will be appointed to the IOG Board following satisfactory completion of regulatory due diligence.
Dougie has 30 years of upstream operational experience, predominantly in the Southern North Sea where he led teams delivering safe and reliable production, drilling, offshore hydraulic stimulation, green and brown field projects. He has worked amongst others for Shell, RWE Dea UK and most recently INEOS Oil and Gas where over seven years he held the leadership positions of CEO, Operations Director and Well Delivery and Decommissioning Director.

The Board is also pleased to announce the appointment of John Arthur as CFO with immediate effect. This will not be a Board position. John is already a trusted member of the IOG team, having been Head of Finance since joining in early 2022, and was previously CFO at Aminex plc.

Fiona MacAulay, Chair of IOG, commented:

“Under Andrew’s leadership since early 2018, IOG has been transformed against considerable odds from an unfunded vehicle with disparate assets into a fully funded UK gas producer. I would like to personally thank Andrew on behalf of the Board for all his exceptional hard work and tenacity over the years and am very pleased that he has agreed to stay on to provide his invaluable advice on our 33rd licensing round ambitions. I would also like to thank David Gibson for his tireless efforts in his time as COO, tackling several complex issues to help IOG become the UK’s newest gas producer earlier this year.
As IOG navigates a challenging initial phase of production and works up further development phases, this is an appropriate time to give the executive team fresh impetus. I am delighted to announce the appointments of Rupert Newall as CEO and Dougie Scott as COO. Given their respective track records, I firmly believe that we have an exceptionally strong management team with the right skills and experience to overcome operational hurdles and grow IOG into a leading UK gas production business.”

Andrew Hockey, outgoing CEO of IOG, commented:

“It has been a real privilege to serve as IOG’s CEO since 2018. We have made great progress in that time and with IOG now established as a gas producer, it is the right time to pass on the baton. Having worked extensively with Rupert over my career, I can vouch for his deep industry knowledge, strategic acumen, financial expertise and drive to succeed. He has been an outstanding asset to IOG since I brought him in as CFO in 2019 and I believe he is the right leader to drive the Company forward on its next stage of growth.”

Rupert Newall, incoming CEO of IOG, commented:

“It is a real honour to be entrusted with the role of CEO of IOG. I would like firstly to pay tribute to the outstanding job Andrew has done in taking IOG from an unfunded micro-cap to an established, cash-generative UK gas production company. I can assure our shareholders that I will fulfil my new role with passion, drive and decisiveness, not just in addressing near-term operational challenges but also the significant growth opportunities ahead.
I believe IOG has a compelling and competitive strategy focused on developing a portfolio of discovered gas resources through owned and operated infrastructure with a low carbon footprint. My priority is to ensure that strategy really delivers significant returns for the benefit of all our shareholders, whilst also playing our part in both energy security and energy transition. My clear focus will be on leveraging IOG’s core strengths, including our key infrastructure ownership in the Saturn Banks catchment area, deep SNS expertise, environmental differentiation and robust partnership with CER.
In looking forward to the exciting opportunities ahead, both within our existing portfolio and via complementary further additions, I am also mindful that we learn the lessons of previous setbacks to improve our future performance. Through proactive risk management, a refreshed operational approach and further additions to a talented core team, we can be better prepared to maximise the value of our established infrastructure and production position in the years ahead.”

Dougie Scott, incoming COO of IOG, commented:

“I am extremely excited to be joining IOG at this pivotal time in the company’s growth path. Andrew and the team have worked incredibly hard to put the business in a cash generative position. The next stage of the journey is to: establish safe, reliable, cost-effective production; deliver the high value organic project portfolio and to continue the net zero journey. I very much look forward to working closely with Rupert, the IOG team and key contractors in overcoming the challenges and delivering on the business objectives to maximise value for our shareholders.”
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (“MAR”), and is disclosed in accordance with the company’s obligations under Article 17 of MAR.

These extensive senior management and board level changes are clearly not just as a result of yesterday’s operational update but as it was a culmination of a number of technical and mechanical problems at Phase 1 there are clearly some cumulative reasons for its severity. 

The changes themselves, for whatever reasons make sense particularly at the COO level where Dougie Scott is amongst the most qualified and competent operators in the UKCS. This appointment is clearly designed to be a clear change and to make a massive difference on the ground. The other positional changes rather speak for themselves and seem to fit pretty well in the circumstances. 

Afentra 

Afentra yesterday provided the following update regarding the previously announced Angolan acquisitions.

Sonangol Acquisition

On 28 April 2022, the Company announced that its wholly-owned subsidiary, Afentra (Angola) Ltd, had signed a sale and purchase agreement (the ‘SPA’) with Sonangol Pesquisa e Producao S.A. (‘Sonangol’) to purchase non-operating interests in Block 3/05 and Block 23, offshore Angola (the ‘Sonangol Acquisition’). As set out in the admission document published by the Company on 10 August 2022, the Sonangol Acquisition is subject to a number of conditions precedent (the ‘CPs’), including the receipt of governmental approvals and the extension of the Block 3/05 Production Sharing Agreement until at least 31 December 2040.

The Company remains in discussion with all relevant parties and expects to finalise the Sonangol Acquisition in Q4 2022, as previously guided. Whilst we remain on track to achieve this timing, satisfaction of the CPs is anticipated to occur after the current long-stop date of 20 October 2022. The Company are therefore pleased to announce it has reached an agreement with Sonangol to extend the long-stop date to 31 December 2022 in order to facilitate satisfaction of the CPs in Q4 2022.

INA Acquisition

On 19 July 2022, the Company announced that its wholly-owned subsidiary, Afentra (Angola) Ltd, had signed an SPA with INA – Industrija Nafte d.d. (‘INA’) to purchase interests in Block 3/05 and Block 3/05A, offshore Angola (the ‘INA Acquisition’). As set out in the admission document published by the Company on 10 August 2022, the INA Acquisition also remains subject to a number of CPs. Given the progress made to date, there is not considered to be any requirement to extend the long-stop date pursuant to the INA Acquisition at this time, as set out in the Company’s admission document.

The Board looks forward to providing shareholders with further updates on both transactions, as appropriate, in due course.

Commenting on the update, CEO Paul McDade said:

“We are pleased to provide this update on the Sonangol and INA acquisitions and remain confident, having engaged with local authorities and counterparties in Angola earlier this month, that the transactions will complete within the previously guided timeline (Q4 2022). On the Sonangol Acquisition, we consider the extension of the long-stop date as a prudent measure to ensure that the conditions precedent can be satisfied within the agreed timeframe. We look forward to completing both transactions and working with Sonangol and the other partners to optimise production and extend the life of these quality, long-life assets.”

This does appear to be just what it says on the tin, a prudent measure to ensure that the deal goes ahead as announced. Although released out of hours I have no concerns that it is market sensitive and I remain supremely confident that these deals will be incredibly good news once they are completed.