Unapologetic UK Oil & Gas (LON:UKOG) chairman David Lenigas says it is now time for serious work to be done in the Weald basin, following Wednesday’s £6mln cash-call.
UKOG confirmed, in an afterhours stock market statement, that it has arranged the placing of 266mln new shares priced at 2.25p.
Whilst only a small discount to the prevailing price on AIM, Wednesday’s closing price was 2.4p, the placing price is a lot lower than the intraday highs of around 4p that followed Friday’s bullish report on the Horse Hill project.
Trading in UKOG, which owns about 20% of Horse Hill, in a volatile session on Friday saw highs of around 4p from an opening price of 3.23p, before finishing the day at 2.77p.
Horse Hill, the so-called Gatwick Gusher, was last week estimated by blue-chip contractor Schlumberger to have around 255mln barrels of oil-in-place per square mile. Schlumberger not only backed up earlier estimates from US reservoir specialist Nutech, which predicted 158mln barrels per mile, but, eclipsed it.
The Horse Hill project does, however, still very much represent an early stage project and much more work will be required to build upon and de-risk these eye-brow raising conceptual assessments.
Proceeds from UKOG’s placing are earmarked to further these efforts.
“I make no apologies for UKOG doing a financing at this juncture,” Lenigas told his followers on Twitter last night. "There is some serious work to be done in Weald now. This costs real money.”
“Now all the rumour mongers can stop using a placing to scare people. It's done now. Lots to do what we need.”
Lenigas, this morning, added: “Just to stop all the scuttlebutt, I did this because we had institutional appetite to get involved. It was time. Strong balance sheet helps.”
Cash raised in the share placing will also be used for general corporate purposes as well as potential investments in-line with UKOG’s strategy; namely UK onshore projects, and specifically those in the Weald basin.