Lochard Energy (LON:LHD), the North Sea exploration company, has raised £3.38 million, before expenses in an oversubscribed placing of shares priced at 7 pence each.
The placing is being undertaken in two tranches, including a firm placing and a conditional placing, with the latter being subject to shareholder approval.
Through its wholly owned subsidiary Zeus Petroleum, Lochard has a net 10% interest in the Athena filed, which is operated by Ithaca Energy (LON:IAE).
Athena is situated in block 14/18b in the Outer Moray Firth area of the UK Continental Shelf, lying approximately 18km west of the Claymore and Scapa fields and the associated production facilities.
The field has been evaluated by Sproule Associates to contain 2P reserves (gross) of 24.4 million barrels of oil (2.4 million net to Lochard). The initial rate from the field is anticipated to be approximately 22,000 barrels of oil per day gross (2,200 net to Lochard) with first production targeted for April 2012.
The field will be produced through the BW Athena FPSO vessel which is nearing the end of a fast track modification and recertification in Dubai. The FPSO modifications are now essentially complete and the vessel is in the final stages of commissioning, the majority of subsea elements at the field have been installed and all rig based activities have been completed with all wells ready for production on final hook up.
A final element of the costs associated with the Athena field development of approximately AUS$3.4 million are due for payment by Lochard prior to revenues from the field expected to commence in April. The company intends to use £2.1 million of the net proceeds of the placing to cover costs in connection with the development.
Haydn Gardner, the chief executive of Lochard, said: “We are delighted to have received the support of investors for this oversubscribed placing which further demonstrates the company’s potential and will enable the directors to see Lochard through to becoming an oil producer.”
In December, Lochard reported that judgment had been handed down in favour of Senergy UK in respect of its litigation with Zeus. In an update today, Lochard said that the precise value of the damages award to Senergy had still not been determined and the two sides had yet to agree on when the costs would be paid.
Lochard said that approximately £600,000 of the net proceeds of the placing were intended to be used to settle certain costs associated with the Senergy litigation. The remainder is intended to be used to pay for the costs of the issue and for general overheads and working capital.
