NU-Oil raises £2.05 million to invest in Canada assets
The company said that the funds raised will be used to continue with its stranded and marginal field strategy in conjunction with the Marginal Field Development Company (MFDevCo), which it has a 50% stake in, and for general working capital purposes.
The company raised a total £2.05 before expenses through a placing of 400m shares at a price of 0.5p each, which raised £2m from an oversubscribed placing, and raised £50,000 from a direct subscription of 10m shares at a price of 0.5p.
The company has re-positioned its assets in western Newfoundland, Canada and following MFDevCo's collaboration with Cosl Drilling Pan Pacific recently, the company said it will continue to implement its stranded and marginal field business model with the next stage being the acquisition of a project.
NU-Oil said that due to the size of projects targeted, significant due diligence and engineering work is often required, while a significant proportion of this has been de-risked through MFDevCo. The company said it "needs to be sufficiently financially robust" in order to ensure that it can manage all eventualities in the acquisition process.
CEO Nigel Burton said: "Having re-positioned our western Newfoundland assets and seen MFDevCo secure a collaboration agreement with COSL Drilling Pan Pacific, the directors are pleased that significant institutional support has allowed the company to raise funds to enable it to continue implementation of the business plan.
"These funds are expected to be sufficient to enable the company to secure its first project using the low cost solutions devised and delivered by MFDevCo and the MFD Consortium." ■