12th Jun 2023 11:33
(Alliance News) - Reabold Resources PLC on Monday said it has invested GBP2.0 million to increase its stake in LNEnergy Ltd and now has a more than 16% stake in the company, having gained increased confidence in LNEnergy's ability to secure permits for the development of its flagship project in Italy.
Reabold is a London-based oil and gas company with projects in the UK, US and Romania. It said it has increased its stake in LNEnergy by just over 13 percentage points for GBP500,000 in cash and GBP1.5 million from the issue of 810.8 million Reabold shares at 0.185 pence each to some LNEnergy shareholders.
Shares in Reabold were up 1.8% at 0.14p each in London on Monday morning.
Reabold's total equity interest in LNEnergy is now 16.2%, up from 3.1%.
The announcement followed Reabold's initial subscription in early May to acquire a 3.1% interest in LNEnergy for GBP250,000 in cash.
Reabold on Monday said it has retained its second option to acquire another 10.5% in new LNEnergy shares for GBP1.8 million in cash.
Reabold said that it has undertaken due diligence since the initial investment in LNEnergy. Consequently, Reabold said it now has increased confidence in the likelihood of LNEnergy gaining field development permits for its primary asset, an exclusive option over a 90% interest in the Colle Santo onshore gas field in Italy.
According to Reabold, LNEnergy believes the field could generate between EUR11 million and EUR12 million in free cash flow per year after taxation.
"The potential in the Colle Santo gas field presents an exciting opportunity for Reabold to pursue its investment strategy to fund low risk, near-term projects with a clear path to generating cash flow," said Reabold Co-Chief Executive Officer Stephen Williams.
"Reabold has acquired a significant interest in the project through its investment in LNEnergy, and we look forward to updating our shareholders with progress on the project throughout the year."
By Emma Curzon, Alliance News reporter
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