Cuadrilla’s leading investor, AJ Lucas, has failed to raise its target in a recent share offer.
The company, which has a 48% stake in Cuadrilla, revealed in a statement to the markets that the total fundraising was $A28.6m. This was about $A18.2m short of the goal.
DrillOrDrop reported last month that AJ Lucas was seeking to raise $A46.3m, partly to fund its contribution to future operations at Cuadrilla’s fracking site at Preston New Road near Blackpool. The money would also repay a loan from Kerogen, AJ Lucas said.
The total sum announced was about 60% of the target.
Institutional investors had paid $26.2m for about 68% of the available shares on offer, the company announced last month.
The remaining shares were then offered to retail shareholders. But this raised just $A2.4m. This was significantly short of the $A8.1m AJ Lucas had hoped for and despite an extension to the offer period of more than a week.
Cuadrilla’s chief executive, Francis Egan, addressed the AJ Lucas annual meeting at the end of November. He said his company ended 2019 with “several challenges to resolve”.
The company fracked seven stages of its PNR2 well in August, causing earth tremors, including the strongest ever induced by fracking in the UK.
The regulator, the Oil & Gas Authority suspended fracking at Preston New Road. In November, the government announced a moratorium on fracking across England.
Mr Egan told shareholders:
“the UK is sitting on a high-quality resource of natural gas and Cuadrilla has been the leading company in demonstrating that.
“Nonetheless, we do need to resolve how to manage and mitigate induced seismicity.”
Cuadrilla has reported it has suspended the two shale gas wells at Preston New Road. At least 10 staff have said they have left the company in the past few months.
Planning permission to drill and frack at the site has now expired but Cuadrilla still has consent to test the wells. The company has said it will be testing the pressure response of the shale reservoir over the next 3-6 months.