MercoPress. South Atlantic News Agency

Falkland Oil and Gas raises £7.6 million in share issue

Falkland Oil and Gas Ltd (FOGL.L) said on Wednesday it conditionally raised 7.6 million pounds (11.8 million US dollars) to help fund capital expenditure on long-lead drilling equipment, and general and administrative costs through 2010 into 2011.

The AIM-listed oil and gas explorer said it issued about 10.4 million new shares to certain directors and institutional investors at 73 pence apiece, representing a 19% discount to the shares' closing price of 90 cents on Tuesday.

Falkland Oil said it placed 1 million of the placing shares with one of its founding shareholders, RAB Special Situations (Master) Fund Ltd, managed by hedge fund manager RAB Capital Plc.

RAB Special now owns about a 33.6% stake in Falkland Oil.

Falkland Oil said it was not subject to the takeover code as it had been incorporated under the Falkland Islands laws and so it was not mandatory for RAB Special, which owns more than a 30% stake in the company, to make an offer for the remaining Falkland Oil shares.

The placing shares would represent about 11.3% of the company's enlarged share capital, Falkland Oil said. Following the issue the Falkland Islands Holdings Plc shareholding in FOGL remains unchanged at 15.000.000 ordinary shares representing a 14.6% interest.

“I am delighted that institutional investors have shown their support for FOGL's prospects through this placing”, said Tim Bushell Chief Executive of FOGL, according to the company’s release.