REG - UK Oil & Gas PLC - £3 million funding facility

UK Oil & GasAnnouncement

28/06/2023 07:00

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RNS Number : 1120E  UK Oil & Gas PLC  28 June 2023

UK Oil & Gas PLC

("UKOG" or the "Company")

 

 

£3 million funding facility

 

UK Oil & Gas PLC (London AIM: UKOG) is pleased to announce that it has
secured a £3 million committed funding facility ("Loan") with RiverFort
Global Opportunities PCC Ltd and YA II PN Ltd ("Investors").

 

The funds will fully fund working capital necessary to progress the Company's
key planned activities over the next 12 months, which include:

 

·    Turkey: further testing of Pinarova-1 and further drilling
preparations/studies

·    Loxley gas discovery: discharge of planning conditions and
preparations for site construction, plus a potential farmout to cover the
planned appraisal and development programme,

·    Horse Hill field: water reinjection work-over, preparations for 3D
seismic acquisition and drilling Horse Hill-3 under the previously announced
farmout to Pennpetro

·    Portland hydrogen storage (UKEn): Planning application work and
conceptual engineering studies.

 

Facility Summary:

 

·    3 committed tranches: £2 million receivable no later than 2 days
after completion ("First Tranche"), £0.5 million receivable by no later than
November 17(th) 2023, and £0.5 million receivable no later than February
16(th) 2024,

·    Further advance of up to £2 million by mutual consent,

·    0% interest, repayable 18 months after each advance,

·    Company retains a right to repay any outstanding amount of the Loan
prior to the expiry of the term, subject to a repayment fee of 10% of the
outstanding balance,

·    Company can raise cash via equity as it may see fit during the Loan's
term.

 

Loan discharge terms:

 

As part of the package the Company will issue to the Investors ordinary shares
("Equity Shares"), which represent between approximately 37% and 51% of the
value of the First Tranche, or 1.3 billion new ordinary shares, dependent on
whether the shares are valued at the Variable Price or Fixed Price,
definitions of which are stated below. The Loan may, at the sole discretion of
the Investors, be repaid by first applying the Equity Shares or, provided all
Equity Shares have been applied, by converting the Loan into new ordinary
shares in the Company. The price at which the Loan may be discharged either by
applying the Equity Shares or converting the Loan is the lower of:

 

·    the Variable Price, being equivalent to 100% (i.e., zero discount) of
the Company's lowest daily volume weighted average price ("VWAP") in the 15
trading days preceding the conversion date or the date the Equity Shares are
applied to discharge the Loan; or

·    the Fixed Price, being the lower of either a 35% premium to a
Reference Price being  the average of the 5 daily VWAPs prior to the date of
the relevant Loan drawdown (i.e., 135% of the Reference Price) or the lowest
price at which the Company has issued equity in a fundraising whilst the loan
is outstanding.

 

Any Equity Shares unsold at the end of the loan term or on early repayment
shall be sold by the Investors and the net proceeds repaid to the Company.

 

All Investor share transactions are subject to:

 

·    an orderly market provision that provides that the maximum number of
shares which can be traded by the Investors or any of their affiliates in any
calendar month shall be such number of shares which is equal to twenty (20)
per cent of the number of shares of the Company that have traded during the
previous calendar month (as confirmed by the reports available by Bloomberg or
their equivalent);

·    neither the Investors nor any of their affiliates shall hold any net
short position with respect to the equity of UKOG during the Loan term; and

·    Investors will exercise any share voting rights in support of any
resolutions proposed by the Company.

 

The principal amount of each Advance is deemed to have been established with
an accrued premium of 4.5% on the relevant drawdown date (i.e., a fee of 4.5%
is incurred on each drawdown which will be added to the principal sum to be
repaid).

 

On each drawdown date the Investors will also be granted warrants to subscribe
for ordinary shares. Each Investor will be granted such number of warrants as
is equal to 33% (in aggregate) of the relevant advance divided by the
applicable Reference Price for that advance. In respect of the First Tranche
the Investors will be granted 1,125,895,598 warrants. The warrants are
exercisable at a premium of 140% of the 5-day average VWAP prior to the
relevant drawdown for a period of 36 months from the relevant date of grant.

 

As is customary, the Loan contains certain default provisions.

 

 

Stephen Sanderson UKOG's Chief Executive commented:

"The facility provides the company with working capital at competitive terms
to fully fund its planned key UK and Turkey activities over the coming year.
The discharge/conversion terms are attractive in that they will be either at
zero discount to the lowest daily VWAP in the 15-days prior to conversion, or
at a premium of 35% to the Reference Price of the relevant drawdown, whichever
is lower. This is in contrast to the likely heavy discount to the Company's
share price associated with a more traditional share placing in today's
financial climate. We look forward to working with the Investors, both of whom
UKOG has transacted with successfully in the past."

 

For further information, please contact:

 UK Oil & Gas PLC
 Stephen Sanderson  / Allen D Howard                   Tel: 01483 941493

 WH Ireland Ltd (Nominated Adviser and Broker)
 James Joyce / James Bavister/ Andrew de Andrade       Tel: 020 7220 1666

 Communications
 Brian Alexander                                       Tel: 01483 941493

 

The information contained within this announcement is deemed by the Company to
constitute inside information under the Market Abuse Regulation (EU) No.
596/2014, as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018. Upon publication of this announcement, this information
is now considered to be in the public domain.

 

 

 

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