£3 million funding facility
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 17th 2023, and £0.5 million receivable no later than February 16th 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:
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UK Oil & Gas PLC |
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Stephen Sanderson / Allen D Howard
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Tel: 01483 941493 |
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WH Ireland Ltd (Nominated Adviser and Broker) |
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James Joyce / James Bavister/ Andrew de Andrade
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Tel: 020 7220 1666 |
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Communications |
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Brian Alexander |
Tel: 01483 941493 |
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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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