Multi-millionaire Tory donor helps firm raise £15m for exploration

Deltic Energy said yesterday it had raised £15 million to finance its ongoing operations, as well as further North Sea exploration.

Among those to have taken part in the London-listed oil and gas company’s call for cash was Tory peer and City of London heavyweight Lord Michael Spencer, through investment firm IPGL.

The money raised will fund Deltic’s current North Sea activities, including its share in Selene, a high-impact exploration well it is working on with Shell.

Proceeds will also be used to cover further investments, and to help the company prepare for the upcoming North Sea licensing round.

Deltic was targeting a minimum of £15m, as well as a further £2m from the open offer, which allowed existing backers to increase their stake.

Details of the successful completion of a placing and subscription were published this morning.

Deltic – formerly Cluff Natural Resources – hit its £15m target, and said the process was “significantly oversubscribed”.

More than 426m new ordinary shares at 3.5p each were conditionally placed with new and existing institutional investors.

In addition, certain directors and senior bosses of the company subscribed for a total of around 2.3m new ordinary shares.

The new stakes represent around 25.7% of the company’s capital on completion of the share placement.

Deltic’s largest shareholder, IPGL, signalled its intention ahead of the fundraise to invest a further £5m in the North Sea firm.

Lord Spencer – who was awarded the title Baron Spencer of Alresford in 2020 – is a director and chairman of the investment firm, which held about 16.8% of Deltic before the share placement.

Described as the richest self-made person in the City, he was Conservatory Party Treasurer from 2006 to 2010, helping to turn a funding deficit into a surplus.

He has pumped millions of pounds into the party – both personally and through his businesses.

In addition to his business interests, Lord Spencer is an associate director on the board of English League One football team Ipswich Town.

Deltic has stakes in a number of southern and central UK North Sea fields, most of which contain natural gas.

The UK Government is trying to boost domestic gas sources to bolster security of supply and, in the long run, reduce the cost of energy bills.

New Prime Minister Liz Truss last week unveiled plans for a new North Sea licensing round, which Deltic is aiming to participate in.

The company has already partnered up with the likes of Shell and Capricorn Energy on projects – including Pensacola, which is due to be drilled soon, and Selene.

Deltic chief executive Graham Swindells said: “We are delighted by the positive response to our fundraising from both new and existing investors.

“We are very grateful for their support in what has been an oversubscribed transaction, and we are happy to offer our wider existing shareholders the opportunity to participate in the open offer.

“It has been a strong endorsement of Deltic’s equity story.

“We are looking forward to our assets moving into the operational phase with the Pensacola well in the coming weeks and, following that, with our work on the Selene prospect – which is anticipated to spud within the next 12 to 18 months.

“This is an exciting time for the company and I look forward to updating our shareholders, longstanding and new, on our progress.”

INDUSTRY: Prime Minister Liz Truss last week unveiled plans for a new North Sea licensing round, which Deltic is aiming to participate in.