Angus Energy plc hopes to raise £12 million, with support from its 49% partner Saltfleetby Energy, to redevelop Saltfleetby gas field in Lincolnshire.
The hydrocarbon company announced yesterday (23 September) that it had raised £1 million from placing 111,111,105 new ordinary shares at 0.9 pence per share.
This will form part of a working capital contingency fund required by debt providers.
The fundraising will be used for pipeline installation and connection to the National Transition System (£1.8m of which £1.1m has been invested), gas processing facilities (£5.7m), site preparation, planning and contingencies (£1.6m), reserve for sidetrack drilling planned for 2021 (£2.4m), and reserve for field abandonment (£1.5m).
The company said it had intended to use North American certified high-pressure gas equipment but the cost of recertification for use in Europe would have been “prohibitive”.
Angus aims to buy all field equipment rather than have “a mix of leasing and purchasing.”
Cash interest and repayments would be met by revenues generated immediately from commercial gas sales, which were attributable to Saltfleetby Energy Ltd.
Managing director, George Lucan, said: “Of particular comfort to shareholders will be the provision for next year’s capital expenditure on the Saltfleetby side-track, which is intended to accelerate recoveries from the field, as well as further demonstrative moves on abandonment reserving.
“Whilst the loan financing is not underwritten, we remain confident of completing the debt placing within a timeframe which should allow us to begin commissioning in Q1 2021.”
Saltfleetby stopped production in 2017 when nearby Theddlethorpe terminal was closed by owner ConocoPhillips.
Angus Energy became the operator of Saltfleetby Gas Field in December 2019.