UK-based IGas Energy has successfully completed a share placing announced earlier Tuesday. A total of 24,330,730 new ordinary shares were sold at the placing price of GBP0.95 ($1.52) with new and existing institutional investors, it said in a statement.
"Based on the placing price and the number of placing shares, the gross proceeds of the placing will be GBP23.1 million. The placing shares being issued represent approximately 15% of the expected enlarged issued ordinary share capital of the company," it said.
The company wants to carry out a work program to study its onshore UK assets before agreeing to any deals that would bring in a partner on the acreage, which includes the Bowland shale in northwest England where Cuadrilla Resources is already active.
Igas plans to carry out a two-well shale appraisal program, which, including comprehensive data collection and a well flow test, could cost up to GBP15 million.
Apart from the Bowland basin, IGas said it has also identified shale play potential across its UK acreage in the East Midlands and the Weald basin in southern England.
IGas is also looking to complete the $66 million acquisition of the Singleton oil field in the Weald basin from Providence Resources. It will increase its credit facility with Macquarie Bank as well as using proceeds from the share placing and existing cash to pay for the deal.
"This fundraising allows us to further appraise our shale assets and augment value ahead of a potential farm-out," said IGas CEO Andrew Austin.
Recent reports elsewhere said that companies including ExxonMobil had been interested in partnering in the assets, although neither ExxonMobil nor IGas confirmed this.
The UK in December lifted a ban on hydraulic fracturing for shale gas. The only company to have carried out fracking tests for shale gas to date in the UK is Cuadrilla Resources, which is privately held and not listed on the stock exchange.
