Union Jack Oil raises £5m in placing for West Newton drilling

The onshore hydrocarbon production, development and exploration company placed 3.3bn new shares at 0.15p each, with SP Angel Corporate Finance the sole broker.

It said proceeds will be used for "highly accretive" projects, including the drilling and testing of two further appraisal wells and the acquisition and reprocessing of new seismic data at its flagship asset at West Newton. Funds will also be used to drill an anticipated side-track well at Biscathorpe and to provide additional working capital.

Executive chairman David Bramhill said: "The placing provides funding to progress the technically and financially compelling West Newton project under a planned two well drilling and testing programme for H1 2020 which we expect will add significantly to the earlier successes seen at the A-1 and A-2 hydrocarbon discoveries.

"We also have in place the funds required to complete a seismic acquisition programme over other structures that have been highlighted over the licence area, that we believe hold significant upside potential over and above the West Newton project. Volumetric data on West Newton recently compiled by the operator, Rathlin Energy, indicates a material onshore discovery which we believe may prove to be of national importance."

The company also said it has "other material conventional assets" in its balanced portfolio at Biscathorpe and Wressle that are expected to see activity over the coming months.

At 1440 GMT, the shares were down 4.2% at 0.17p.