Onshore hydrocarbon production, development and exploration company Union Jack Oil plc raised £7 million from an “oversubscribed” placing and subscription.
The company now has some £11 million which it will use to extend its drilling operations and seek acquisition opportunities following the UK’s departure from the EU, the pandemic and energy prices.
Union Jack will also pay the deferred cash consideration due on first oil production at the Wressle development on-track in Q4 2020 as a result of past acquisitions that have resulted in the Company holding a 40% licence interest.
It also plans to drill a side-track well at the Biscathorpe discovery in 2021, invest in growing the company’s other conventional onshore drill-ready projects including a proposed low-cost, side-track well at the producing Keddington oilfield and a proposed conventional well at North Kelsey.
In addition, the money will go towards the costs of maintaining its licence and project obligations across its portfolio while reserving some funds for working capital.
Union Jack raised the money before expenses by placing and subscription of 4,375,000,000 new ordinary shares of 0.025p each at a price of 0.16p per new ordinary share.
The fundraising comprises a placing of 4,127,187,500 new ordinary shares and a subscription of 247,812,500 new ordinary shares.
“The board is delighted with the result of this oversubscribed fundraising and thanks existing shareholders for their ongoing support and welcomes new investors to the share register,” said David Bramhill, executive chairman of Union Jack.
“The company is already funded for the imminent drilling at West Newton and for the associated extended well test activities and the cost to first oil production at the Wressle development.
“With the fundraising net proceeds, our cash position increases to approximately £11 million and will assist in funding our next growth phase.
“This fundraising will allow us to continue to invest in our conventional onshore flagship projects and invest for growth in our wider licence interests and drill up to four wells in our drill-ready portfolio before the end of 2021.
“We also believe there will be attractive acquisition opportunities available from the ongoing fallout resulting from Covid, energy prices and Brexit.”
Mr Bramhill added that the company directors remained “extremely confident” in the future prospects of Union Jack.