UK Oil & Gas PLC (AIM:UKOG) shares fell 26% in Tuesday’s early deals in reaction to a cut price, £500,000 equity raise.
A placing sees 2 billion new ordinary shares sold to investors at 0.025p per share, compared to Monday’s closing share price of 0.34p
Proceeds will be used to acquire a hydrogen storage site in the East Yorkshire salt basin, the UK onshore firm said in a statement. Some proceeds will also be used to secure intellectual property related to prior infrastructure developments, it added.
"The company has decided to call on additional capital to take advantage of the unique and timely opportunity to further its acquisition of a new hydrogen storage development site in East Yorkshire,” said chief executive Stephen Sanderson.
UKOG highlighted that the project is envisaged as part of the UK government's East Coast Track #1 Hydrogen cluster.
The deal aligns with UKOG's plans to expand its hydrogen storage portfolio ahead of the government's Hydrogen Storage Allocation Round in early 2025, the company noted.
UKOG is also opening a retail offer to raise additional capital from individual private investors, via the via the CMC CapX platform.