(Alliance News) - UK Oil & Gas PLC said Monday it has raised GBP2.0 million through a share placing, which will go towards accelerating the works required to bring wells Horse Hill-1 and Horse Hill-2z into stable oil production.
The oil & gas firm issued 235.3 million shares at a price of 0.85 pence per share, reflecting a 15% discount to its closing price on Friday, which was 1.02p.
Proceeds will go towards works to bring both wells into oil production, including long-lead time gas utilisation and facilities.
In addition, following recent discussions, UK Oil & Gas said its co-venturers in Horse Hill Developments Ltd are unlikely to contribute their 14% share of current cash calls pertaining to well drilling, testing or production costs.
UK Oil & Gas currently holds an 86% stake in the Horse Hill oil field. Among its partners are London-listed Alba Mineral Resources PLC, which holds a 12% stake in Horse Hill.
Shares in UK Oil & Gas - which is headquartered in London - were down 6.4% at 0.959p on Monday. Alba shares were 4.7% lower at 0.16p.
As a result of these discussions, proceeds will also go towards funding any potential shortfall from its partners. In addition, UK Oil & Gas has proposed to its Horse Hill partners to use part of the proceeds to fund their cash call obligations in return for a dilution of their holding in Horse Hill Developments.
Following this, UK Oil & Gas will have 6.80 billion shares issued overall.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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Alba Mineral Resources (ALBA)
Uk Oil & Gas (UKOG)