Oil and gas investor Reabold Resources plc said it expected to invest £1 million in Corallian Energy Ltd through a conditional convertible loan instrument for the Victory gas field, West of Shetland.
The convertible loan is conditional on Corallian receiving the consent of 75% or more of its shareholders. Reabold has an existing 36.9% shareholding in Corallian, which can count towards the 75% threshold.
Corallian aims to use the funds to support work related to a draft field development plan for Victory to be submitted before the end of 2021, and for general working capital purposes.
For the year ended 31 October 2019, Corallian reported a loss of £7,161,415 and at the same date reported net assets of £1,974,480.
“We are delighted to be able to provide further investment in Corallian through an attractive structure in order to fund near-term activity, in line with our stated strategy,” said Reabold co-chief executive Stephen Williams.
“The Victory environmental study will take place this summer and we are eagerly awaiting the submission of the draft field development plan to the OGA [Oil & Gas Authority] at the end of this year.
“Victory is a simple, low-risk project, which has been fully appraised and requires no further pre-development drilling, accelerating the potential return on investment for Reabold.”
Through its investments in Corallian, Reabold also has interests in the Inner Moray Firth through Corallian’s 45% interest in the JV licences.
Corallian Energy is a private UK oil and gas company which holds interests in four basins in the UK: West of Shetland, Central Graben, Inner Moray Firth and Viking Graben.