Jersey Oil & Gas Plc (LON:JOG) revealed it is raising £1.6mln through an oversubscribed placing of shares to new and existing shareholders.
The cash injection is earmarked for the junior North Sea oiler’s share of spending on technical studies and evaluation for its exploration project, where partner Statoil is due to drill in summer 2017.
It also provides working capital to allow management to continue to pursue a pipeline of production acquisition targets.
"Over the last year, the Company has successfully delivered on its stated strategy to de-risk its exploration portfolio most notably through its high impact farm-out in Licence P.2170 to Statoil,” said chief executive Andrew Benitz.
“Today's funding will allow us to conduct further technical studies to advance our knowledge of the Verbier Well ahead of drilling, which we believe will be of benefit to our shareholders.
“It further serves to strengthen the group's financial position as we continue to pursue a number of production acquisition targets under evaluation in the UKCS.”
Jersey is issuing 1,45mln new shares priced at 110p each, a relatively small 6.8% discount, and the new shares will represent some 15% of the group’s enlarged share capital.
The upcoming Verbier well is the main attraction for investors, as Jersey is one of few junior explorers to have completed a farm-out and have active drill plans for next year.
Under the farm-out deal, Statoil is to pay up to US$25mln for Verbier, the first exploration well on the p.2170 licence. The licence is estimated to host over 500mln barrels of oil in place, across two prospects estimated at 300mln and 212mln barrels each.