Nu-oil & Gas reduces FY loss, raises need for additional capital injection

"However," the AIM-listed company said, "further shareholder dilution cannot be ruled out."

The company booked a 12-month pre-tax loss of £816,000, from a year-ago loss of £5.3m. Most of the losses were linked to administrative expenses, including exceptional items.

It said directors believed Nu-Oil had developed a very attractive business model in choosing to focus on the development of stranded and marginal fields.

"It has concluded the necessary foundations and its global potential should see an upturn in activity in 2017," Nu-Oil said in a statement.

"Implementation of the business plan will require an injection of additional capital to execute the business model but that may be achieved in ways that do not effect dilution, such as grant funding or new equity in MFDevCo."

In a separate announcement, Nu-Oil said it had entered into an option agreement with G2 Energy.

Under that agreement, G2 Energy would have an exclusive option to earn 100% of Nu-Oil's working interest in the Deep Rights of licence EL1070, offshore western Newfoundland.

That licence was presently held by Nu-Oil's Canadian subsidiary, Enegi Oil Inc (EOI).

"Should the option be exercised, EOI will retain a 5% gross overriding royalty in the Deep Rights, such that 5% of any revenue generated from the development of EL1070 will be owned by EOI," Nu-Oil said. The option is for a 24-month period.

At about 11:54 GMT, shares in Nu-Oil were down 3.45% to 0.42p.