Cluff Natural Resources (CLNR) has announced plans to raise £750,000 through share placing ahead of the next North Sea licensing round.
The London-headquartered firm says it has made “substantial application” for additional licenses from the Oil and Gas Authority (OGA) in its 30th licensing round.
CLNR says the funds will be used to evaluate any new licenses, as well as continuing the search for farm-in partners or investors to fund drilling on its Southern North Sea P2248 and P2252 licenses.
The firm estimates the pair could contain 2.4trillion cubic feet of gas.
In November, CLNR struck a deal with the OGA to extend its holding of the licenses for a further year.
CLNR will produce the funds through an additional 46.8million new ordinary shares, with the net proceedings to fund the firm through to the fourth quarter of 2018.
Decisions on the OGA’s 30th licensing round are expected in Q2 of this year.
In a company statement, chairman Algy Cluff said: “Your Board attaches high importance to the 30th Round and believes that it will herald a new era of exploration and development in the UK North Sea.
“Strong oil and gas prices, political stability in an unstable world, existing infrastructure and known geology render the North Sea one of the most desirable basins.
“In addition, this Round includes for the first-time existing discoveries which will reduce exploration risk and accelerate development.
“The Board of Cluff Natural Resources believes that the Company’s balance sheet should be strengthened in anticipation of favourable consideration being given by The UK Oil and Gas Authority to our application for licenses, primarily in the prolific Southern North Sea gas basin.”