Background

IOG PLC was incorporated and commenced trading in November 2010. Operating in the oil and gas industry, the Company specialised in the development and production of gas in the southern North Sea off the coast of Norfolk. IOG PLC was listed on the Alternative Investment Market at the London Stock Exchange in September 2013 and was the parent company of three subsidiaries which held various gas extraction licences and infrastructure.

Unfortunately, the Group began to have financial difficulties following the investment in, and failure of, a significant development project, leading to substantial losses and an unsustainable debt burden, including £100 million bond debt. The Group made attempts to resolve its financial challenges through payment deferrals, debt restructuring and potentially a sale of its subsidiaries. However, these processes were ultimately unsuccessful. Facing increasing creditor actions, IOG PLC filed for administration to allow more time and stability through the administration moratorium to continue trade and progress restructuring and disposal options.

Action

Restructuring Advisory Partners, Chad Griffin and Ian Corfield were appointed Administrators on 10 October 2023. The team, led by Partner, Chad Griffin and supported by Director, Simon Baggs and Manager, Luke Mahoney successfully stabilised the business working with the experienced staff at the Company to ensure that operational matters were dealt with properly, ensuring safe and stable gas production. The Administrators then pursued both restructuring and disposal options, engaging extensively with the key stakeholders being the Bondholders, the Joint Venture Partner and the North Sea Transition Authority (NSTA).

Ultimately a disposal of the subsidiaries to the Joint Venture Partner was agreed. The sale completed following satisfaction of various condition precedents including Bondholder consent, key contract novations and regulatory approval from the NSTA.

The assignment itself was complex with the team needing to be flexible and adaptable, problem solving alongside the experienced staff at the Company whilst maintaining good oilfield practices to maintain gas production and revenue generation to conserve cash and minimise funding support. The team needed to work with non-UK based Bondholders, the Joint Venture Partner and the regulator, guiding them through the process to achieve the best result in the circumstances.

Despite large losses to certain unsecured creditors, the Administrator built strong relationships with key trading partners through an open and honest approach. One key supplier commented “It’s been a pleasure working with FRP and under your watch we had the most stable and productive period of operation since we started work on the assets – much appreciated under such difficult and uniquely challenging circumstances”.

Outcome

The team successfully completed the sale of the IOG PLC business and subsidiaries on 30 August 2024, saving jobs and safeguarding the future of the business. The sale also secured an expected 12p in £ distribution to Bondholders, with HMRC paid in full and a full prescribed part distribution to be made to unsecured creditors.