The weald-based drilling company, UK Oil & Gas, is seeking support for a share issue to fund new drilling in Turkey.
UKOG has said its activities in 2021 would focus on the SE Turkish Basur-Resan oilfield, where it has a 50% licence stake. The company has also applied for an interest in neighbouring licences.
In a statement to investors after the close of trading on 21 May, UKOG said the Turkish interests had been assessed to contain “significantly greater discovered oil volumes than any of the company’s UK projects”.
“In order to deliver the Company’s stated strategy and growth objectives, it will require further funds in the near future for, amongst other things, its funding obligations under the agreed work programme for the Resan Licence and any of the new Application Blocks should they be awarded to the Company and its partner.”
The company has called a general meeting next month to seek shareholder approval for the share issue and the removal of the right of existing shareholders to have first refusal.
The statement said the approvals were needed so that the company could “raise money for its working capital obligations”.
Under the agreement to acquire a stake in the Basur-Resan licence, UKOG agreed to wholly fund the first $5m of the work programme. This is for four wells and 100km of seismic surveying. After this, UKOG will pay 50% of all costs.
Drilling consent for the first appraisal well, Basur-3, was granted in April 2021. Yesterday’s statement said construction of the well site and drilling pad was nearly complete. Drilling was expected to begin in the summer. The 2021 work programme also includes 120 line KM of seismic surveying, UKOG said.
The company said it expected a further appraisal well, Resan-6, would be drilled in 2022, along with processing and interpretation of new seismic data.
The statement added that if UKOG and its partner were awarded the licences to the south and south east of the Resan, the seismic programme would be extended into the new block.
- The meeting is at 11am on Monday 7 June 2021 at Hays House, Millmead, Guildford, Surrey, GU2 4HJ. Shareholders have been asked not to attend the meeting in person because of Covid-19 restrictions and vote by proxy by 11am on Saturday 5 June 2021.