UK Oil & Gas PLC on Friday said that the placing was necessitated by the UK government’s accelerated hydrogen storage schedule.

Shares in the London-based exploration and production company, which focuses on projects in the UK and Turkey, were down 24% at 0.019 pence each in London on Friday morning.

This came after the company announced a fundraise of £750,000 through the placing of around 3.8 million new shares at a price of 0.020 pence each. This represented a 20% discount to UK Oil & Gas’s Thursday close of 0.025 pence per share.

The company said it undertook the fundraise in response to the government’s December announcement that it would be accelerating the first hydrogen storage allocation round, now brought forward to the third quarter of 2024 from the second half of 2025.

The company said it intends to apply for an allocation award for its hydrogen storage project in Portland, Dorset, and that the government’s new timetable requires expediting the project’s related works and studies. UK Oil & Gas also said that it was in discussions with an unnamed ‘significant international trading house’ regarding its participation in the company’s hydrogen storage project.

New shares are expected to be admitted to trading on the AIM market of the London Stock Exchange no later than January 18, the company said.

Chief Executive Officer Stephen Sanderson said: ‘’The placing’s proceeds will help us to put our material Portland, Dorset salt cavern hydrogen storage project forward for an allocation award in the government’s first hydrogen storage allocation round, now scheduled for the third quarter of 2024. We are excited by the government’s acceleration of the allocation round and its emphasis upon geological hydrogen storage, a welcome recent development which now makes the new hydrogen storage sector real and tangible.‘

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