Union Jack Oil (AIM: UJO ) has raised £7 million at 0.16p per share, increasing the group’s cash position to around £11 million, to fund its next growth phase.

The UK-focused group is already fully funded for its drilling and extended well test activities at West Newton and operating costs to first oil production at the Wressle development, which is home to licences PEDL180 and PEDL182 in which the company holds a 40% operated interest.

Use of Proceeds
The primary use of proceeds from the oversubscribed placing and subscription of 4,375,000,000 new ordinary shares will be:
•    Pay the deferred cash consideration due on first oil production at the Wressle development on-track in Q4 2020 as a result of past acquisitions that have resulted in the Company holding a 40% licence interest;
•    Drill a side-track well at the Biscathorpe discovery planned for 2021;
•    Investment for growth in the Company's other conventional onshore drill-ready projects including a proposed low-cost, side-track well at the producing Keddington oilfield and a proposed conventional well at North Kelsey;
•    Fund ongoing costs to maintain its licence and project obligations across its portfolio and working capital.

“This fundraising will allow us to continue to invest in our conventional onshore flagship projects and invest for growth in our wider licence interests and drill up to four wells in our drill-ready portfolio before the end of 2021,” said Executive Chairman, David Bramhill. 

Shares in Union Jack Oil have improved from lows of 0.8p seen in April 2020 and were trading above the placing price at 0.175p in afternoon trading.

Bramhill said the group believes there will be ‘attractive acquisition opportunities’ available as a result of the ongoing fallout resulting from COVID-19, energy prices and Brexit.

He added, “The directors remain extremely confident in respect of the future prospects of UJO and look forward to updating the market on the imminent activity at West Newton and Wressle in the coming weeks and months and thereafter on our wider drill-ready portfolio."

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