RNS Number : 6104J
  Irvine Energy PLC
  05 December 2008
   

    Irvine Energy plc / Index: AIM / Epic: IVE / Sector: Exploration & Production

    5 December 2008
    Irvine Energy plc ("Irvine" or "the Company")
    Update including �610,000 Fund Raising 

    Irvine Energy plc, the AIM listed oil and gas exploration and production company, has received share placing commitments to raise
�610,000 through the issue of 244,000,000 new ordinary shares at 0.25p per share ("the Placing"). The funds raised will be used to provide
additional working capital. The Company is also pleased to announce an operations update, including progress made at the Ayres 1-20 well in
Kansas.

    The Placing

    The Placing includes subscriptions for a total of 12,000,000 new ordinary shares by entities associated with directors of the Company,
Michael Frayne, Anthony Samaha, and Ross Warner.  Adelise Services Limited, an entity associated with Michael Frayne, Reabold Limited, an
entity associated with Anthony Samaha, and Bournemead International Ltd, an entity associated with Ross Warner, have each subscribed for
4,000,000 shares. Following completion of the placement, Adelise Services Limited, Reabold Limited and Bournemead International Ltd will be
interested in 63,345,238, 7,000,000 and 5,000,000 ordinary shares in the Company respectively, representing 6.1%, 0.7% and 0.5% respectively
of the issued share capital of the Company following the placing.

    The Placing new ordinary shares will represent 23.5% of the Company's enlarged issued share capital following the placing, and will,
when issued, rank pari passu in all respects with the existing issued ordinary shares. Application will be made to the London Stock Exchange
for the new ordinary shares to be admitted to trading on AIM and it is expected that admission will become effective and that trading in the
new ordinary shares will commence on 9 December 2008.

    The total number of ordinary shares in issue following the Placing will be 1,037,674,826.

    Operational Update

    Further to the announcement on 11 November, the Company continues to review details of the 3D seismic programme expenditure and cost
over-runs with the Operator, Metro Energy. The amounts claimed are material, and further information on the seismic expenditure will be
reported in due course following this detailed review. The Company's production revenues are currently being retained by Metro Energy to
offset production costs, whilst this review process and discussions are ongoing, as allowable under the joint venture agreement. 

    GasRock continues to exercise its discretion not to make any further advances under the debt facility, with the Company having on-going
discussions with GasRock towards resolving matters to their satisfaction. The sale of non-core assets remains central to the Company's
proposal to meeting GasRock's requirements and providing funds for additional expenditure involving Metro. The Company is continuing to
advance discussions with a number of parties regarding potential asset disposals and other transactions.

    The director's believe that the placing proceeds, together with the Company's existing cash balance of approximately �200,000 will
provide sufficient working capital for the Company for up to 9 months of trading. This time period may be reduced or extended depending on
the extent to which production revenues continue to be retained by Metro, the agreed level of the cost over-runs, and the continued support
of GasRock. During this time period, the Director's intend to complete the sale of certain non-core assets and also explore the possibility
of alliances, joint ventures or farm-outs with third parties in order to reduce the ongoing capital requirement for Irvine. In addition, the
directors will explore the possibility of a merger or corporate transaction if that creates value for shareholders.

    In the event that material asset disposals are not completed within this time period, then the Company is likely to need to raise
additional finance within the next 12 months.

    Irvine is pleased to announce that the first well drilled on its Ayres 3D shoot in Kansas has discovered a significant Bartlesville
channel at approximately 2,000 feet in depth.  The Ayres 1-20 well is currently pumping at a rate of 10 barrels of oil per day, with some
water. Interpretation of 3D seismic indicates the channel improves in quality to the east and south of this well, potentially setting up an
additional 10 well locations. Evaluation is ongoing for further development of this acreage in which Irvine has a 75% working interest.  

    Irvine Chairman Doug Manner said, "We are pleased with the support from investors for the placement, enabling the Company to raise
additional working capital in difficult financial markets.  We are conducting a strategic review in tandem with our partners with the aim of
focussing our activities to realise the potential of our portfolio. We are working together to ensure that all parties benefit from what is
a strong portfolio of assets, which I believe is underlined by the encouraging results received from Ayres."

    * * ENDS * *

    For further information please visit http://www.irvineenergy.com or contact:

 Michael Frayne   Irvine Energy plc            Tel: +44 (0) 20 7766 7500
 Doug Manner      Irvine Energy plc            Tel: +1 214 908 6384
 Tim Redfern      Evolution Securities         Tel: +44 (0) 20 7071 4300
 Adam James       Evolution Securities         Tel: +44 (0) 20 7071 4300
 Hugo de Salis    St Brides Media & Finance    Tel: +44 (0) 20 7236 1177
 Victoria Thomas  St Brides Media & Finance    Tel: +44 (0) 20 7236 1177



This information is provided by RNS
The company news service from the London Stock Exchange
 
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