Deltic Energy (LON: DELT) has successfully raised £15 million to finance its ongoing operations, as well as further North Sea exploration.
Among those to have taken part in the London-listed oil and gas company’s fundraise were Tory peer and City of London heavyweight Lord Michael Spencer, through investment firm IPGL.
The cash raised will fund Deltic’s current North Sea activities, including its share in Selene, a high-impact exploration well it is working on with Shell.
Proceeds will also be used to cover further investments, and to help the company prepare for the upcoming North Sea licensing round.
Deltic unveiled plans on Monday evening to carry out an equity fundraise, consisting of a share placing and subscription.
It was targeting a minimum of £15m, as well as a further £2m from an open offer, which will allow existing backers to increase their stake.
‘Significantly oversubscribed’
Details of the successful completion of the placing and subscription were published on Tuesday morning.
Deltic hit its £15m target, and said the process was “significantly oversubscribed” – sign off from company shareholders is still required.
A total of 426,285,717 new ordinary shares, at a price of 3.5 pence each, have been conditionally placed by Deltic with new and existing institutional investors.
In addition, certain directors and senior management of the company have subscribed for a total of 2,285,712 new ordinary shares.
The new stakes represent about 25.7% of the company’s capital after completion.
Baron Spencer of Alresford
Deltic’s largest shareholder IPGL signalled its intention ahead of the fundraise to invest a further £5m in the North Sea firm.
Lord Spencer – who was awarded the title Baron Spencer of Alresford in 2020 – is the director and chairman of the investment firm, which held about 16.8% of Deltic prior to the placing.
He has been described as the richest self-made person in the City, and was Conservative Party treasurer from 2006 to 2010.
In addition to his business interests, Lord Spencer is an associate director on the board of English League One football team Ipswich Town.
Open offer
Formerly called Cluff Natural Resources, Deltic has also confirmed details of the open offer to raise gross proceeds of up to approximately £2m
Plans to issue up to 58,581,868 open offer shares at the same placing price have been confirmed, payable in full on acceptance.
Qualifying shareholders will be able to one open offer share for every 24 existing ordinary shares they hold.
The fundraise is still subject to shareholder approval, and a circular outlining the terms of the process and containing a notice of general meeting to be held on 30 September 2022, is expected to be dispatched tomorrow.
Deltic aiming to help gas push
Delitc has stakes in a number of Southern and Central North Sea fields, the majority of which contain natural gas.
The UK Government is currently trying to expand domestic gas sources to bolster security of supply and, in the long run, reduce the cost of energy bills.
In support of that aim Liz Truss recently confirmed plans for a new North Sea licensing round, something Deltic is planning to enter.
It has already partnered up with the likes of Shell and Capricorn Energy on projects, including Pensacola, which is due to be drilled soon, and Selene.
Graham Swindells, chief executive of Deltic Energy, commented: “We are delighted by the positive response to our fundraising from both new and existing investors.
© Supplied by Deltic Energy“We are very grateful for their support in what has been an oversubscribed transaction and we are happy to offer our wider existing shareholders the opportunity to participate in the open offer.
“It has been a strong endorsement of Deltic’s equity story and we are looking forward to our assets moving into the operational phase with the Pensacola well in the coming weeks and following that with our work on the Selene prospect, which is anticipated to spud within the next 12-18 months.
“This is an exciting time for the Company and I look forward to updating our shareholders, long-standing and new, on our progress.”