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UKOG seeks permission to take controlling stakes

The UK onshore oiler is seeking to become an operating company, meaning it will be able to directly own controlling operated interests in projects instead of being simply an investment company
oil and gas operations
It is the largest London listed Horse Hill stakeholder with a 32% indirect interest

UK Oil & Gas Investments PLC (LON:UKOG) shares advanced in Monday’s early deals as the onshore oiler indicated it is prepare a more hands on role in its strategy.

The company, in a stock market statement, revealed that it intends to change its trading status under AIM rules from an investing company to that of an operating company.

In the somewhat semantic statement it highlighted that after the change it would be able to take direct controlling operated interests in oil and gas exploration, appraisal and production assets and generally conduct its business with fewer restrictions than an investing company.

READ: UKOG raises more capital as Horse Hill remains in the spotlight

"The trading status change is an essential forward step in the company's evolution,” said executive chairman Stephen Sanderson.

“The new status will enable UKOG to take direct controlling and operated interests in existing assets and in any future acquisitions."

It will require approval from shareholders and a circular is due to be sent to shareholders during July.

In Monday's early deals UKOG shares were up 0.3p or 15.8% to trade at 2.2p each.

More capital raised for 'opportunistic investment'

UKOG last week raised an additional £2mln of new capital – on top of £10.5mln raised in the preceding month – and said the funds were earmarked for an “opportunistic investment to help deliver the company's stated goal of consolidating and expanding its asset base in the Weald Basin.”

It comes as the company looks forward to progress at the Horse Hill oil project, located some 5 miles from Gatwick airport.

With a 32% interest, UKOG is the largest London-listed stakeholder in the so called ‘Gatwick Gusher’ oil project.

The spotlight is presently on the project amid a potentially pivotal new work programme.

Last month, the programme was greenlighted by regulator The UK Oil and Gas Authority (OGA) – clearing a 150-day extended production well test, to be followed by new well drilling.

Specifically, the programme is a follow up to the 2016 testing, which saw aggregate oil flows at a rate of 1,688 barrels per day over short periods (three 30-90 hour tests).

The aim of the work is to prove commerciality ahead of a possible field start-up next year.

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