Union Jack Oil plc has said it planned to consolidate its share capital to avoid price volatility, increase liquidity and to enhance the perception of the company.
The company’s proposals include consolidating the existing ordinary shares in issue so that every 200 existing ordinary shares will be consolidated into one consolidated ordinary share.
Union Jack added it was well positioned to become a mid-tier oil and gas company with “low-risk, high-impact, onshore conventional production, appraisal and exploration projects”.
“The directors believe that the existing share capital structure is no longer appropriate, as the high number of shares in issue combined with the relatively low price per share is thought to result in excess volatility, reduced liquidity and a widening in the market bid and ask share price spread in the company’s shares,” said the company in a letter to shareholders last Friday (19 February).
“The board believes that the company is now in an excellent financial and operating position given the significant progress made in recent years on its three key projects at West Newton, Wressle and Biscathorpe and that now is an appropriate time to implement the consolidation.
“The consolidation will reduce the 19,815,906,400 existing ordinary shares currently in issue to 99,079,532 consolidated ordinary shares.”
The proposals will be put to a general meeting on 10 March 2021.
Union Jack’s key projects are in West Newton, Wressle and Biscathorpe and the company has interests in two oil fields at Keddington and Fiskerton Airfield.