UK Oil & Gas has announced it has raised £5m in a placing, prompting a sharp fall in the share price.
At the time of writing, the company’s shares were down more than 23% at 0.18p.
In a notice to investors, UKOG said the placing of more than 2.7 billion shares would pay for its remaining share of drilling and testing costs in Turkey, as well as general working capital.
It said it anticipated remaining costs of about £2.06m for the Basur-3 well, where drilling began on 26 June 2021. UKOG also said another £1.1m was expected to be spent on a 2D seismic programme in the Resan licence area.
The company also said it proposed to offer existing shareholders the chance to apply for more shares in a separate open offer up to £5m.
Today’s placing takes the total number of UKOG shares to 15,982,258,630.
UKOG raised £2.2m for Turkish operations in a previous placing on 23 July 2020.
It announced it had raised another £4.2m in a placing in June 2020 to repay a loan, pay for production equipment and well intervention at Horse Hill in Surrey, and to fund other onshore projects.
A further £2m was raised from a single institutional investor in December 2019 to help achieve stable long-term oil production at Horse Hill, the company said.