Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

UKOG raises £10mln and kicks of Broadford Bridge well testing

The hotly anticipated flow testing programme is now underway at the Broadford Bridge well in West Sussex
oil and gas operations
UKOG expects flow testing to continue until the end of 2017

UK Oil & Gas Investments PLC (LON:UKOG) told investors it has raised £10mln of new capital as it confirmed the start of a hotly anticipated new testing programme at the Broadford Bridge well.

The programme will see UKOG test up to nine zones in the Broadford Bridge well’s Kimmeridge Limestone formations.

READ: Broadford Bridge and Horse Hill going back-to-back is good news

Brief testing of the KL1 zone, which is described as ‘shale dominated’, has led the company to conclude that whilst hydrocarbons are present a sustained commercial flow rate “could only be obtained via reservoir stimulation beyond the scope of its existing regulatory permissions.”

The next tests will take place in the KL2 limestone, before the programme moves to the primary targets in the KL3, KL4 and KL5 zones.

This programme will determine whether the naturally fractured oil bearing zones can deliver commercial flows and volumes.

UKOG said it expects flow testing will continue until the end of 2017.

A £10mln convertible loan

Not only does the newly announced funding cover the Broadford Bridger programme, the company said it is now covered for its forward drilling and testing work for the next twelve months – including Broadford Bridge, its share of the new Horse Hill campaign and the Holmwood exploration well.

The £10mln injection is coming from a loan agreement with an investment consortium arranged by Riverfort Global Capital, including Cuart Investments PCC Ltd and YA II PN Ltd.

It sees UKOG receiving an initial tranche of £7.5mln and a further £2.5mln coming before the end of this year – repayable by November 2019 and December 2019 respectively.

The loan is interest free, but can be converted into new UKOG equity –at a price of either 8p or at a 10% to a calculated average market price at the time of conversion. Conversions can come in parcels of no less than £250,000 at a time, capped at £3mln per quarter.

The lenders, and their affiliates, are contractually obliged not to short the company’s shares for as long as the loan is outstanding.

UKOG can repay the loan in cash at any time, under certain conditions, though there would be a 10% early repayment fee.

Now funded for a year

"This £10mln funding, the largest in the company's short history, ensures that our stated drilling and testing programme, spanning four wells over the next 12 months, is fully funded,” chief executive Stephen Sanderson said.

“The programme has key regulatory permits in place, is designed to further appraise the wider Kimmeridge continuous oil deposit plus the Horse Hill Portland oil discovery.

He added: “ Its overall aim is to provide stable commercial production and cash flow by early 2019.

“A positive programme outcome will give the company a solid base for further drilling and development of the significant untapped Kimmeridge resource-base underlying its extensive licence interests.

“The flow testing at BB-1z continues to be a key element of the Company's wider programme and we remain highly encouraged by the natural flow of further hydrocarbons to surface."

View full UKOG profile View Profile

UK Oil & Gas Investments PLC Timeline

Related Articles

coal trucks
March 14 2018
Polish group Cobant is the latest partner and will work with AEG to develop a new "Super Fuel" that combines CoalSwitch and reclaimed coal
oil and gas operations
April 26 2018
The Verbier discovery was a breakthrough in 2017, and the 2018 progammes aims to follow up that success.
oil and gas operations
July 09 2018
Greka highlighted improved revenues which boosted gross profit despite the challenges experienced in India and China through 2017.

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use