Union Jack Oil has raised £7m for work at oil sites in the East Midlands and future acquisitions.
The fundraising had been expected after rumours among investors last week.
In a statement this morning, Union Jack said the money came from an oversubscribed placing and subscription of 4,375m shares.
The company said the money would be used to pay for:
- Development of oil production at the Wressle site near Scunthorpe
- Drilling at Biscathorpe, Keddington and North Kelsey in Lincolnshire
- Licence and project costs
- Working capital
- Acquisition opportunities resulting from Covid-19, energy prices and Brexit
The placing takes the total number of shares in Union Jack to 19,815 million. The company’s share price closed down 8.7% at 0.17p.
The executive chairman, David Bramhill, repeated that Union Jack was funded for drilling and well tests at West Newton in East Yorkshire and initial oil production at Wressle.
He said the fundraising increased cash to £11 million:
“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.”