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AIM-listed exploration company Falkland Oil & Gas (LSE:FOGL) has announced today it will issue new shares to raise £48 million in line with the company’s drilling programme in the Falkland Islands.
FOGL will commence trading of 112,764,675 new shares of 0.002 pence on 18 January at 43 pence per share, upon securing admission requirements, making the total shares in issue at 320 million, about 50% more than the currently issued shares. The 43p offering is a 14% discount from yesterday’s trading. FOGL stocks closed 50.5p.
Stocks are now down 7% to 47p as of 10:15 AM GMT following this declaration at a turnover volume of 15.69 million.
The company, which declares of being debt free, decided to obtain funds thru equity financing while actively seeking interested parties to participate in the operation that can meet its shareholders expectation.
Drilling Programme
FOGL has secured a contract with Liev Eiriksson to undertake the drilling programme for its two wells where the capital funding will be invested. According to the company, Live Eiriksson will first drill for Borders & Southern plc before proceeding to FOGL’s drilling site. Results of this operation are of interest to the company in relation to its own prospects in the southern area of its licences.
Loligo Project
Funding obtained will be financed to a deeper drilling on the Loligo well which has been drilled in the shallow levels previously. FOGL has secured approval from the Falkland Islands Government in December 2011 for its environmental impact. Loligo covers an area of 600 square kilometers first mapped in 2006 believed to have more than four billion barrels of oil or 25 trillion cubic feet of gas, together with the Trigg and Tree Bears as part of the Loligo complex.
The results of the drilling on Loligo will determine the next steps the company will undertake.
Substantial Participation
Falkland Island Holdings Group, through its wholly-owned subsidiary Erebus Limited has agreed to subscribe 2 million shares. The group currently holds 5.8% issued shares of FOGL. RAB Group has also committed to place 6 million shares. Total placements of FOGL directors are at 170,000 shares.
Chief Executive Officer, Tim Bushell, said:
“We are delighted by this show of support from new and existing shareholders. The additional funds will significantly increase our flexibility over the forthcoming drilling programme expected to start in early May with the drilling of Loligo.”
Company Spotlight
Falkland Oil & Gas Limited was incorporated in the Falkland Islands in 2004 to and was admitted to the Alternative Investment Market of the London Stock Exchange in the same year to exclusively undertake offshore oil and gas exploration in the Falkland Islands. As of 12 January 2012, the company has a market capitalisation of £97 million.
References
↑ Falkland Oil & Gas Loligo Operation
↑ Falkland Oil & Gas Factsheet
