UK Oil & Gas Investments PLC (LON:UKOG) has raised £5.5mln through a share placing, with the injection of funds earmarked to pay for upcoming operations at the Horse Hill discovery and the broader Kimmeridge oil projects.
A total of 611.1mln new shares have been issued to investors at a price of 0.9p each. The placing was said to have been oversubscribed – the price was set below the level seen prior to yesterday’s news driven rally.
On Thursday, UKOG share price shot up after it confirmed that a planned long term production test at Horse Hill had received regulatory approval – it was a significant boon to UKOG, which with a 32% interest is the largest London listed investor in the project.
At Horse Hill, the partners are now clear to carry out the 150-day test, which is designed to clarify the commercial merits of the project’s conventional Portland reservoir and two zones in the unconventional Kimmeridge play.
The new funding provides financial cover for UKOG’s share of future costs, including the proposed Horse Hill 2 appraisal well, which is contingent upon the upcoming well test results.
Horse Hill 2 is anticipated to follow directly after the well test, in late 2018 or early 2019.
Additionally, the new funds support the company as new regulatory applications are prepared and lodged to convert Horse Hill from exploration and appraisal to production, and the group’s other assets are advanced.
Further well sites are being progressed in the PEDL234 area, with a view to demonstrating that the Kimmeridge is viable across its broader licence areas.
It will drill and test the Arreton oil discovery, on Isle of Wight.