United Oil & Gas confirms $6.25 million equity raise
"The Rockhopper Egypt Acquisition is a transformational development step for our Company,” stated Chief Executive, Brian Larkin.
The acquisition will have an effective date of 1st January 2020 which on completion will deliver 1,100 barrels of oil equivalent per day alongside infill and exploration upside as well as exposure to low risk development.
As part of its funding package, United will raise $6.25 million with the sale of 159 million ordinary shares priced at 3p each.
BP Group has also agreed to provide the company with a prepayment financing structure of up to $8 million transacted under a 2002 ISDA Master Agreement.
“Upon completion of this deal, United will have material production which will generate significant cash flow for reinvestment into the business,” said Larkin.
Shares in United Oil & Gas were trading 22.84% lower at 3.125p on Monday morning.
Additionally, United issues 114.5 million shares to Rockhopper Exploration, subject to “certain lock-up and orderly market disposal provisions” for up to a period of 12 months from completion.
Larkin hailed the developments as an important milestone and highlighted the company as on track to transform into “a highly cash generative and asset backed business.”
“Along with activity across our wider portfolio, including the potential for future production from Italy and moving our Jamaican asset forward, we expect 2020 will not be short of significant news flow across our asset base,” he added.
United Oil & Gas announced in July that it had entered the binding conditional sale and purchase agreement with Rockhopper Exploration to acquire its 22% working interest in the Abu Sennan concession and associated leases in Egypt.
Already an ongoing infill drilling campaign at the site has demonstrated rising gross production levels as well as highlighting infill potential across the seven production concessions.
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