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Reabold Resources pleased with progress at Corallian investment
Pre-cash flow upstream oil and gas project investor Reabold Resources updated the market on its investment in Corallian Energy on Monday, having previously announced the signing of two share subscription agreements in Corallian in November last year.
The AIM-traded company said Corallian's portfolio of UK oil and gas licenses includes the Colter prospect, offshore South of England.
It said the investment, the first in line with Reabold's stated strategy, resulted in the prospect becoming fully-funded at a 40% planned Corallian working interest, and comprised £1.5m in two tranches to acquire a 35.4% interest in Corallian.
The investment also included the right to appoint a director to the board.
"Since Reabold's investment, we are delighted that significant progress has been achieved within the Corallian portfolio, including the farm out of Colter to United Oil & Gas, and the farm out of its Wick prospect to Upland Resources and Corfe Energy for a fully carried well at 25% working interest," Reabold's board said in its statement on Monday.
Corallian had informed the company of its intention to raise additional capital in order to increase its exposure to the Colter prospect from 40% to 50%, to increase its exposure to the Wick prospect from 25% to 40%, and to further progress additional assets including the Oulton prospect.
Following the fundraise, Corallian would be fully funded for all of that activity.
Reabold said it intended to participate in the fundraise, in order to increase its exposure to Corallian, and thus to Colter, Wick and the additional Corallian opportunities.
Reabold added that it remained fully funded from its existing cash balances to participate in the raise as planned, and would continue to have cash on its balance sheet to pursue additional opportunities.
The company also announced that the drilling of Colter remained on track for the first half of 2018, and noted the release on 2 February by Upland Resources - operator of the Wick prospect offshore North-East Scotland in which it has a 40% interest - that environmental survey work had been completed.
It said the low-cost, potentially high-impact well was due to spud in the third quarter, with Reabold "looking forward" to updating shareholders of subsequent developments on those high-impact wells.
"We are delighted by Corallian's intention to increase its exposure to the low-risk, high-impact Colter and Wick prospects," said Reabold Resources co-CEO Stephen Williams.
"We are excited by this opportunity to take part in the fundraise and deliver our stated strategy of delivering shareholder value through capital deployment."
Sachin Oza, the other co-CEO, added that the company was continuing to assess a number of high quality opportunities, given the current opportune time to deploy capital.
"[We] look forward to an exciting year for us and our shareholders, during which the company envisages at least four or five drilling opportunities," Oza said.