UK Oil & Gas has revived a bid to reorganise its share capital, needed to raise money for future projects, including a gas site in Surrey.

Earlier this month, the company adjourned a general meeting on the scheme, following questions from shareholders.

The meeting will reconvene next month to approve a reduction in the number of shares in issue.

UKOG reported there were more than 29.5 billion shares in issue. The company wants to reduce this to 2.9 billion.

In a statement on 1 February 2024, UKOG also said it was seeking authority to issue further shares.

In the past five years, the UKOG share price has fallen from a peak of 12.81p to less than £0.01p. The closing price today was 0.0076p.

UKOG said it needed to issue more shares to fund the appraisal programme at Loxley, near the village of Dunsfold, and meet planning conditions required before work can start on the well pad.

Last week, UKOG said in a statement that failure to approve the shares reorganisation would mean “the company will not be able to fully implement its operational and growth strategy”.

Traffic conditions at Loxley

Key pre-operational conditions for the Loxley site include changes to the highway (condition 7) and speed limit on stretches of local roads (condition 10).

Surrey County Council (SCC) has confirmed that all the costs associated with the highway works and speed limit restrictions must be paid for by the site operator, UKOG’s subsidiary UKOG (234).

The work comprises:

• A new junction for the site access onto High Loxley Road
• Carriageway widening on part of High Loxley Road
• Junction improvement works at the junction of High Loxley Road and Dunsfold Road
• Speed limit reduction from 60mph to 40mph on sections of High Loxley
  Road, Dunsfold Common Road and Dunsfold Road. This has to be put into effect before any works on the site can start.

The council told us that all this work and the speed restrictions would be covered by a section 278 agreement under the Highways Act 1980.

Section 278 agreements are legal agreements between a highway authority and a developer to carry out highway alterations on the existing road network.

The council told us that the expected cost of the traffic regulation order for the speed limit reductions would be “around £1,500 and £5,000”.

It said the expected cost of the highway work was “not yet known”. A spokesperson said:

“the cost of the works will be calculated once the scheme of works has received technical approval from SCC”.

We also asked SCC when the section 278 agreement would be finalised. The spokesperson said this was “not yet known”.

But DrillOrDrop understands that negotiations on the section 278 agreement are at an early stage. We also understand that the traffic regulation order for the speed limit reduction requires a consultation, which has not yet been advertised, and it is customary for the police to be consulted in these situations.

Throughout the Loxley planning process, opponents raised concerns about the danger of large slow-moving lorries turning into and out of High Loxley Road from Dunsfold Road, near Pratts Corner.  

Highway safety concerns were also raised by Jenny Wigley QC, the barrister representing SCC at the public enquiry held into the proposal in 2021

To mitigate these safety issues, the planning conditions require all heavy goods vehicles (HGVs) to approach the site on the Dunsfold Road from the east and turn left into High Loxley Road.

A spokesperson for the campaign group, Protect Dunsfold, said:

“Pratts Corner is already notorious locally as an accident black spot and we understand that there have been three separate incidents there with vehicles coming off the road in just the last five months.

“Even with the proposed carriageway modifications, the turning off the B2130 towards the proposed drill site will be very tight and will result in rigid vehicles like tankers crossing the central line on a blind bend.  

“That is why there will also be a traffic management scheme involving four-way traffic lights and ‘banksmen’ to control HGV access, although we have still not seen the details of this traffic management scheme. 

“It is one of the worst places in the local highway network for an increase in the number of HGV movements.  Given the obvious safety risks, it is crucial that the council ensures that this speed limit reduction from 60 to 40 mph is actually implemented, as the Condition requires, before any other works start at the Loxley site.”

We asked UKOG to comment on the cost of the highway work and the reason for the adjournment of the initial meeting. The company did not respond.

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