North Sea minnow Jersey Oil and Gas said today that it would raise £20million through an equity placement.
London-listed Jersey said it would use the cash to pay for an appraisal programme on the North Sea Verbier field, operated by Statoil.
A recent sidetrack well on Verbier led to the discovery of commercial reserves.
The proceeds of the placing will also help pay for exploration drilling on the nearby Cortina prospect.
Jersey’s shares were down 16.93% to £2.11 on the alternative investment market in London in early trading.
Jersey has had a bumpy ride with Verbier, which is located in the outer Moray Firth.
In September, the firm’s shares nosedived after it announced the results of an exploration well had been disappointing.
But a week later, Jersey said a sidetrack well would be drilled, sending the shares back up.
Jersey chief executive Andrew Benitz said today: “Evaluation of the well results alongside the existing 3D seismic data is ongoing and today’s placing ensures that we are able to fund our working interest in this highly attractive licence once the appraisal drilling programme is confirmed by the operator.
“Alongside this we have a strong pipeline of asset opportunities and are encouraged by the active deal flow in the North Sea.
“The additional funds will allow us to maintain our balance sheet strength as we continue to pursue a production-led acquisition strategy within the UKCS.”
Statoil owns 70% of the licence, Jersey has 18% and CIECO is on 12%.