Cluff raises £0.75m ahead of 30th offshore licensing round results

Natural resources investing company Cluff Natural Resources announced a subscription of a total of 46,875,000 new ordinary shares on Friday, to raise a total of £0.75m before expenses.

The AIM-traded firm said the new ordinary shares were to be issued at a price of 1.6p per new ordinary share.

It said the proceeds of the subscription would be used to begin the evaluation of any additional licences awarded in the 30th offshore licensing round, including confirming estimated prospective resource volumes associated with any new licences.

Licence awards were expected to be made before the end of the second quarter of 2018.

The funds would also help to continue the process to secure farm-in partners and strategic investors to fund drilling on licences P2248 and P2252.

Additionally, Cluff would use the money to complete ongoing geological and technical work on P2248, and continue to develop well designs and planning for a prospective multi-well drilling programme in 2019 on key exploration targets on P2248 and P2252.

The board said it expected that the net proceeds of the subscription would fund the company through to middle of the fourth quarter.

“Your board attaches high importance to the 30th round and believes that it will herald a new era of exploration and development in the UK North Sea,” said Cluff chairman Algy Cluff.

“Strong oil and gas prices, political stability in an unstable world, existing infrastructure and known geology render the North Sea one of the most desirable basins.”

In addition, Cluff said the round included for the first time existing discoveries which would reduce exploration risk and accelerate development.

“The board of Cluff Natural Resources believes that the company's balance sheet should be strengthened in anticipation of favourable consideration being given by the UK Oil and Gas Authority to our application for licenses, primarily in the prolific Southern North Sea gas basin.”