Reabold increases investment in Rathlin with £1m contribution

Upstream oil and gas investment company Reabold Resources has increased its investment in Rathlin Energy UK - the operator of the West Newton field - through participation in an advanced subscription agreement, it announced on Thursday.

The AIM-traded firm said it currently held a 24% economic interest in West Newton, via its 36% holding in Rathlin, with its ultimate economic interest to be confirmed once the next fundraising round was complete.

It explained that, following the successful drilling result at West Newton A-2, Rathlin had raised £1.79m by way of an advanced subscription agreement, in which Reabold invested £1m.

The additional shares to be issued under the advanced subscription agreement would be priced at the higher of either a 20% discount to the price achieved in the next Rathlin funding round, or at 84.27p per share, being the price per share of Rathlin's previous fundraise.

If no funding round has occurred within 24 months, then the additional shares would be issued at 84.27p per share.

Reabold said its investment was satisfied from its existing cash resources.

For the year ended 31 December, Rathlin reported a loss of £1.06m, and on the same date, it had net assets of £8.92m.

“We are delighted with the rapid progress made so far at the West Newton field,” said Reabold Resources co-chief executive officer Stephen Williams.

“With testing now underway, Reabold is pleased to provide further funds to progress this crucial project through the testing programme and beyond.

“The opportunity to increase our exposure to this potentially transformational asset, and on attractive financial terms, is something that could create substantial additional value for Reabold shareholders in the event of continuing success.”