Island Gas Resources to take bigger stake in licences after latest fundraising
25 November 2009
Island Gas Resources is raising £13.75 million in a fully underwritten share placing as part of a move it said would “reinforce its position as the leading company dedicated to UK onshore gas production”.
The 60p per transaction will see Peter Levine’s Levine Capital Management increase its stake from 3.7% to 12.5% and underwrite the deal.
Island came to AIM in December 2007 and since then has been working on a portfolio of assets across the UK, mainly with its joint venture partner, Nexen. The latest fundraising comes as Island begins farming-up in some of the licences held with Nexen. In doing so it will become operator of more than 50% of its contingent recoverable resources, and boost its own gas in place by 38%, or 970 billion cubic feet.
As part of a deal, Island will increase its interest in the Point of Ayr licences by 25% to 75%, where it also become operator. At the Four Oaks, North Dees and Parkside licences it will increase its stake by 15% to 35%. In return, it will pay £5 million which will be used to fund a carried work programme.
Andrew Austin, Island’s chief executive, said: “The proposed fundraising will help us accelerate the development of IGas by increasing our assets and bringing forward our production plans. Significantly this positions IGas to play an important role in ensuring the security of UK energy supply.”
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