UK Oil & Gas PLC (LON:UKOG) £2 million fund raise – oil production at Horse Hill

UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that it has raised £2 million (“Proceeds”) from a single institutional investor through a placing (“Placing”) of 235,294,117 new ordinary shares (“Placing Shares”) in the capital of the Company.

The Placing’s issue price of 0.85 pence per share (“Placing Price”), represents approximately a 15% discount to the closing price of the Company’s ordinary shares on the business day prior to this announcement.

Use of Proceeds

Whilst the Company has ample cash to fully fund its remaining 85.635% interest share of Horse Hill-2z (“HH-2z”) drilling-related costs plus forward HH-1 and HH-2z production test operations, the net Placing proceeds will be used partly to accelerate long-lead time gas-utilisation, facilities and other related works necessary to bring HH-1 and HH-2z into stable long-term oil production.

Furthermore, following recent discussions, the Company now anticipates that its Horse Hill Developments Ltd (“HHDL”) co-venturers are unlikely to contribute their 14.365% share of current cash calls pertaining to HH-2/2z drilling, HH-1/HH-2z testing and the production-related costs detailed above.

Consequently, and in addition to the above, the net Proceeds will be used to fund any potential shortfall from the HHDL partners. In this respect, the Company has also submitted a proposal to its HHDL partners to use part of the Proceeds to fully fund their current cash call obligations in return for a commensurate dilution of their holding in HHDL. UKOG owns a 77.9% controlling interest in its HHDL subsidiary, which holds a 65% operated interest in the Horse Hill oil field and licences.

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Oil Man Jim Company Oil & Gas Podcast, 4th December 2019

It should also be noted that UKOG’s wholly owned subsidiary, UKOG (137/246) Ltd, which holds a 35% direct interest in the Horse Hill oil field and surrounding licences, will continue to fund its full share of current and future Horse Hill costs. UKOG’s overall interest in the field and licences totals 85.635%.

Admission and Settlement

Application will be made for the Placing Shares to be admitted to trading on AIM and admission is expected to occur on or around 05 December 2019 (“Admission”). Upon Admission, the Company will have 6,973,683,381 Ordinary Shares in issue. There are no shares held in treasury.

The total voting rights in the Company are therefore 6,973,683,381and shareholders may use this figure as the denominator by which they are required to notify their interest in, or change to their interest in, the Company under the Disclosure Guidance and Transparency Rules. The placing is conditional upon the terms of a placing agreement with WH Ireland and shares being admitted to trading on AIM.


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