Jersey Oil and Gas PLC plans fundraising to maintain momentum at Greater Buchan
The company is aiming to raise up to £15mln through a share placing and subscription
() unveiled plans to raise up to £15mln through a placing and subscription to strengthen its balance sheet ahead of what it said were anticipated commercial negotiations for its Greater Buchan Area (GBA) project in the North Sea.
The AIM-listed firm said the placing will be via an accelerated bookbuild at a price of 165p per share, a 1.2% premium to its closing price on Tuesday, which will open immediately following the announcement.
WATCH: Jersey Oil and Gas say Greater Buchan Area project has ‘multiple benefits’
The company also said it intends to launch an offer to qualifying participants to raise up to a further £2mln at the placing price, adding that directors Andrew Benitz, Vicary Gibbs, Ronald Lansdell and Marcus Stanton have indicated their intention to subscribe for up to £60,000 in aggregate for up to 36,361 new shares.
Jersey said the proceeds will be used to maintain momentum of the GBA project’s workstreams to ensure that time and funding pressures do not interfere in the efficient delivery of the overall project.
More specifically, the company said it is aiming to maintain progress into the Front End Engineering and Design (FEED) phase of the project until the farm-out process has been concluded, as well as preserve the value of a 2025 start-up date, with marine surveys to support the environmental statement required for the field development plan required to be initiated imminently
The firm added that the funds will also strengthen its balance sheet ahead of expected farm-out negotiations, providing “more time and flexibility to seek to deliver the optimum result for shareholders”.
“Over the past three years, Jersey Oil & Gas has made significant progress in developing what has become a flagship project for the North Sea. Our recently announced development concept for the Greater Buchan Area is based on 172 [million barrels of oil equivalent] of 2C contingent resource estimates with significant exploration upside potential and aims to deliver initial production of up to 40,000 [barrels of oil per day]. The GBA hub is planned to be one of the first electrified platforms in the basin as we seek to deliver future production at industry leading carbon intensity levels”, Jersey O&G chief executive Andrew Benitz said in a statement.
“Given this potential, it is imperative that, as we move into the next key phase for the project, namely, the farm-out process, which I am pleased to report has recently formally been launched, Jersey Oil & Gas is financially robust such that it can conduct negotiations from a position of greater strength whilst at the same time maintaining momentum on the project’s other workstreams”, he added.
The company’s shares jumped 6.8% to 174p in early deals on Wednesday.
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