West Newton in Yorkshire - About Rathlin, Reabold and Union Jack oil
Rathlin Energy drilled the initial well at West Newton in 2014, but struggled to get enough money to drill a second due to low energy prices. Reabold, was formed at the beginning of 2018, invested £3 million in Rathlin, giving it a 36 percent stake in the company and a 25 percent share of the gas project. Union Jack Oil, has a 16.7 percent interest in the project at West Newton.
On August 29th 2019, the partners in the West Newton project announced that they believed that it is a “significant oil and gas discovery”, and now deemed more significant than simply a “pure gas discovery” as was previously thought.
A CPR (Competent Persons Report) is being produced by the companies to provide details on the oil in place, gas in place and recoverable volumes. This is expected at the end of 2019 or early 2020. All being well this should raise the NPV10 calculations.
The Extended Well Test (EWT), running at the time, was paused to allow the test equipment to be reconfigured to design and implement a revised production test and validate the identified oil column.
Implications of placing
Investors will know tomorrow whether the £24 million placing has gone to plan. All seems positive and the discount to the prevailing share price is not outrageous showing decent investor demand for the story.
Once the £24 m is banked at the end of the month following the General meeting. RBD will buy a stake in Rathlin giving it a 75% ownership of the company and hence a very strong stake in the Yorkshire West Newton A and B project.
The EWT this year, CPR end of this year or early next and drilling of WN-B in late Q1 2020 will be critical to further the Net Asset Value of the project.
It has been a rough time for the UJO share price, despite a 17% share in West Newton, with Chris Williams @chrisoil selling down to below a 3% stake from 7%. They stand at 0.2p right now. But good news for UJO coming tomorrow when the placing conclusion is confirmed and all set for West Newton. Hopefully, Chrisoil will cease his selling, which has been at a big profit for him. More than doubling his money.
Its got to be good value for UJO at 0.2p given this news!
The Proposed Placing to Raise £24 million for Reabold Resources
At 4.45pm today, further to its announcement on 7 October 2019, Reabold Resources (RBD), announced a proposed Placing of 2,666,666,666 new ordinary shares ( at a price of 0.9 pence per Placing Share, raising £24 million, compared with the closing price today of 1.01p.
The Placing is being conducted through an accelerated Bookbuild which will be launched immediately following the 4.45ppm RNS and made available to eligible institutional investors.
The Bookbuild is expected to close no later than 8 a.m. on 9 October 2019, but Stifel and the Company reserve the right to close the Bookbuild earlier or later, without further notice. Stifel Nicolaus Europe Limited is acting as bookrunner for the Placing.
Previous RNS relating to RNS
On October 4th, RBD Reabold said: "The majority of the proceeds intended to be utilised to meaningfully increase Reabold's interest in Rathlin Energy UK Ltd, to fund and accelerate the permitted, two well work programme at the West Newton project, and to exercise its existing option in Danube Petroleum Ltd, providing the required funding for the IM-2 well."
On October 7th, Reabold Agreements confirmed that it was planning to increase its interest in Rathlin Energy (UK) Limitedto up to 74.99 per cent., through a £16 million cash investment and, potentially, a £7 million equity swap with existing Rathlin shareholders.
Rathlin Subscription Agreement
RBD has entered into a binding subscription agreement with Rathlin, conditional on completion of the Placing, to make a cash investment of £16 million in Rathlin, at a valuation of £2.75 per ordinary share in the capital of Rathlin.
Proposed Equity Swap and Lock In Agreement
The Company has verbally agreed, with certain shareholders of Rathlin, to complete a swap of their Rathlin Shares for new Ordinary Shares at the Placing Price at the same value at which Reabold is subscribing for new Rathlin Shares pursuant to the Rathlin Subscription Agreement, up to a maximum value of £7 million.
Discussions and terms are at an advanced stage and the Company is targeting finalising the Proposed Equity Swap ahead of a General Meeting to be held on October 28 2019, with the intention of concluding the Proposed Equity Swap, with admission of the Swap Shares to trading on AIM expected to occur concurrently with the admission of the Placing Shares, which is anticipated for the 29 October 2019.
The Company requires that as a condition to completing the Proposed Equity Swap and under the terms of the offer, that the Swap Shares be subject to a three month lock-up period and a further three month orderly market agreement. Further announcements regarding the Proposed Equity Swap, including the level of uptake by Rathlin shareholders, will be made as and when appropriate.