(Sharecast News) - Oil and gas investor Reabold Resources has exercised its second option to acquire 116 new shares in LNEnergy, it announced on Monday, by investing £1.65m.
The AIM-traded firm said it would use £0.75m from its existing cash, with the remaining £0.9m funded through the issue of 486,486,487 new shares for 0.185p each to LNEnergy.
It said the move would elevate its ownership stake in LNEnergy to 26.1% of its expanded share capital.
LNEnergy's principal asset is an exclusive option for a 90% stake in the Colle Santo gas field - a substantial gas resource with an estimated 65 billion cubic feet of 2P reserves.
The Colle Santo field was poised for development with two production wells already drilled and flow-tested.
LNEnergy anticipated it could generate an estimated €11m to €12m of gross post-tax free cash flow annually.
The University of Chieti-Pescara of the Region of Abruzzo established a technical-scientific committee in November to support the development of the Colle Santo field in Abruzzo, Italy.
Reabold said the committee would collaborate with LNEnergy's technical and engineering advisor, Italfluid, to provide third-party expert assistance in evaluating data collected before and during LNEnergy's planned, controlled long-term test and monitoring campaign.
"Reabold is excited by the potential of the Colle Santo project and confident in its decision to invest further in LNEnergy," said co-chief executive officer Sachin Oza.
"The formalisation of the Technical Scientific Committee at the University of Chieti-Pescara shows constructive local stakeholder engagement in the Colle Santo project and follows on from positive regulatory progress taking place at a government level as Italy looks to secure domestic energy supply.
"We look forward to updating shareholders on our progress in Italy as we develop this important regional project."
At 1303 GMT, shares in Reabold Resources were up 1.11% at 0.12p.
Reporting by Josh White for Sharecast.com.
Reabold Resources (RBD)