UK Oil & Gas to fund hydrogen storage projects via new share issue

London-based energy company UK Oil & Gas PLC (LON:UKOG) said today it has conditionally raised GBP 1 million (USD 1.27m/EUR 1.17m) in gross proceeds via a share issuance to advance its hydrogen storage projects.

The capital will be used to fund new studies necessary to submit applications for government revenue support in the hydrogen storage allocation rounds.

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The new ordinary share placing is carried out at 0.05 pence per share, representing a discount of about 37% to the company’s closing price on August 2. The transaction will be put to a shareholder vote at the forthcoming meeting on or around August 21, UKOG noted in a statement.

The proceeds will be used to further specific activities required to materially advance the company's hydrogen storage projects. The funds will also allow UKOG to advance negotiations with identified potential joint venture partners and seal a land option agreement for a further hydrogen storage site.

The company will also seek additional letters of support (LoS) for its revenue support application similar to those recently provided by major energy and hydrogen infrastructure players RWE, Sumitomo and SGN.

The share placing announcement came after UKOG on Friday said that RWE has sent a LoS for its strategic Dorset and Yorkshire underground hydrogen storage projects which are located near the German energy group’s planned green hydrogen plants within the Solent Cluster, Didcot and Teesside.

UKOG is focused on oil and gas exploration and production in the UK and international onshore sectors. It is also expanding into gas storage, hydrogen and geothermal at home. The company's storage projects are operated by its wholly-owned subsidiary UK Energy Storage (UKEn).

(GBP 1 = USD 1.275/EUR 1.176)