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Highlights:
- £500,000 Equity Raise: UK Oil & Gas PLC (LSE:UKOG) raises capital to acquire a hydrogen storage site in East Yorkshire and secure related intellectual property.
- Strategic Hydrogen Focus: The acquisition aligns with UK government’s East Coast Track #1 Hydrogen cluster initiative, ahead of the Hydrogen Storage Allocation Round in 2025.
- Retail Offer for Private Investors: Additional capital sought through a retail offer via the CMC CapX platform.
UK Oil & Gas PLC announced a £500,000 equity raise, issuing 2 billion new ordinary shares at a heavily discounted price of 0.025p per share compared to Monday’s closing price of 0.34p. The fundraising caused a 26% drop in the company’s share price during Tuesday’s early trading.
The company plans to use the proceeds to acquire a strategically significant hydrogen storage site located in the East Yorkshire salt basin. Additionally, funds will be allocated to secure intellectual property related to prior infrastructure developments, which UKOG believes will enhance its capabilities in the hydrogen sector. Chief executive Stephen Sanderson emphasized the importance of the raise, stating that the funds will allow the company to capitalize on a “unique and timely opportunity” to advance its hydrogen storage portfolio.
This initiative forms part of UKOG's broader strategy to position itself as a key player in the UK government’s East Coast Track #1 Hydrogen cluster, which is central to the country’s energy transition goals. UKOG aims to strengthen its hydrogen infrastructure ahead of the government’s Hydrogen Storage Allocation Round, scheduled for early 2025. The East Yorkshire site is expected to be a critical component in the company’s push to develop a robust hydrogen storage portfolio.
In addition to the placing, UKOG is launching a retail offer to individual private investors via the CMC CapX platform to raise further capital. This approach seeks to involve smaller investors in the company’s strategic growth plans.
While the discounted equity raise led to a sharp decline in the company’s share price, UKOG remains focused on its long-term objectives within the hydrogen storage sector. By expanding its portfolio in alignment with government initiatives, the company aims to play a pivotal role in the evolving hydrogen economy, which is expected to be a cornerstone of the UK’s energy transition strategy.
