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Regency Mines back in the Horse Hill saddle

New testing success has prompted a return to the UK oil project which Regency exited last April.
Regency Mines back in the Horse Hill saddle
Angus Energy will own 29.9% of Regency as a result of the deal.

Regency Mines (LON:RGM) is back in the Horse Hill oil project, near Gatwick airport, following the signing of an agreement with Angus Energy.

Andrew Bell’s Regency previously exited the project last April.

The deal to buy back in comes after breakthrough well testing results last week, which propelled the shares of the listed Horse Hill stakeholders sharply higher.

A cash and share deal, which Regency says is worth £400,000 consideration, sees £223,730 paid in cash and 54.23mln Regency shares issued to Angus Energy.

Subsequently, Angus will own 29.9% of the AIM quoted company. And it has also been granted options to purchase a further 17.8mln shares in the next eighteen months at a price of 0.39p.

“We sold out of the same percentage of HHDL last year. We now buy back on broadly equivalent terms,” said Regency chairman Andrew Bell.

“With the additional information now available, the asset now meets the investment criteria stated then.

“The timing of progress to production can be better quantified and in our opinion the potential and scale of the rewards now far outweigh the risk."

Flow testing in the first of three targeted zones - the deeper Kimmeridge limestone reservoir - saw oil retrieved to surface at rates above 450 barrels per day, which was far in excess of expectations.

In an interview with Proactive Investors Stephen Sanderson, chief executive of the largest listed Horse Hill participant UK Oil & Gas (LON:UKOG), highlighted that the project was “no longer a science project” and said it was now at the edge of being a commercially viable discovery.

Two further zones will be assessed in the ongoing testing programme.


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February 23 2016

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