Reuters reports that Russia and Ukraine-focused oil producer JKX Oil & Gas (JKX.L) plans to raise 37.8 million pounds ($61 million) through a placing of new shares to fund the development of reserves to boost production.
The FTSE 250 company said the proceeds of the placing would finance the building of a second rig at its Rudenkovskoye field and a liquefied petroleum gas (LPG) facility, both in Ukraine, and help it continue its well workover programme in Russia.
It added that the additional cash would also enable it to maintain the ability to make selective acquisitions.
JKX is targeting production of 20,000 barrels of oil equivalent per day in 2011 up from 13,657 bpd in the three months to the end of September 2009.
It said the $11 million LPG facility would enable it to extract increased value from its Ukrainian gas production. To date, the Russian workover programme was "encouraging" with the first sales of gas expected by the end of this year, it added.
The placing, being conducted through an accelerated bookbuilding by Oriel Securities and Brewin Dolphin was priced at 265 pence per share, a discount of 4.7 percent to the closing price on Jan. 25.
The placing shares will represent about 9.1 percent of the existing ordinary shares or 8.3 percent of the enlarged share capital.
Shares in JKX were down 3.3 percent to 269 pence by 0846 GMT, having doubled in value over the last twelve months.
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