UK Oil & Gas has announced it has secured a £3m loan to fund operations over the next 12 months.

In a statement to investors yesterday (28/6/23), UKOG said the money would pay for:

• Loxley/Dunsfold, Surrey discharge of planning conditions and preparations for site construction, plus a potential farmout of appraisal and development programme
• Horse Hill, Surrey workover to create a water injection well, preparations for 3D seismic surveying and drilling Horse Hill-3 farmed out to Pennpetro
• Portland hydrogen storage, Dorset planning application and engineering studies
• Pinarova-1Turkey further testing and drilling studies

The loan is from RiverFort Global Opportunities PCC Ltd and YA II PN Ltd.

UKOG said it would receive £2m within two days of completing the deal. £0.5m would be paid by 17 November 21 2023 and another £0.5m by 16 February 2024.c

A further advance of up to £2m would be paid by mutual consent.

The loan carries 0% interest and is repayable 18 months after each advance.

As part of the deal, UKOG will issue 1.3 billion ordinary shares to the lenders.

UKOG’s chief executive, Stephen Sanderson, said:

“The facility provides the company with working capital at competitive terms to fully fund its planned key UK and Turkey activities over the coming year.”

This is the third loan UKOG has arranged with the lenders.

In August 2019, UKOG took out a £5.5m loan with the same lenders to fund an increase its stake in the Horse Hill licence. It repaid that loan in June 2020 it said to “eliminate the uncertainty attached to loan note conversion timings and pricing”. UKOG said this was “perceived to exert a negative influence” on its share price.

In November 2017, UKOG arranged a £10m loan with YA II PN and Cuart Investments PCC Ltd, arranged by RiverFort. That money was to fund drilling and testing at Broadford Bridge, in West Sussex (now mothballed) and drilling at Horse Hill.