UK Oil & Gas shares sank on Friday after raising £400,431 through a heavily private placing to advance its South Dorset hydrogen storage project.
The placing, conducted with a select group of professional investors at 0.0102p per share, will provide essential funding for the project’s development and its participation in the government’s upcoming Hydrogen Storage Business Model (HSBM) Procurement Round.
The placing was completed at a 42% discount to the prior closing price. No directors participated in the round, which was reserved only for institutional investors. Private investors were shut out of the placing.
The funds will be directed towards several key initiatives to strengthen the project’s position. A significant portion will support the conceptual design of a joint venture focusing on green hydrogen generation and import facilities at Portland Port.
This venture aims to establish infrastructure for importing Middle Eastern green hydrogen carrier fluids and producing hydrogen locally, which would then be transmitted to the South Dorset storage site and distributed across the UK via SGN’s H2 Connect pipeline.
The company will also allocate funds towards the pre-Front End Engineering Design phase, including the conceptual design of surface facilities, pipeline routing, and borehole placements. This work is crucial for meeting the HSBM Procurement process eligibility criteria. Additional funding will cover operational expenses related to the procurement process and bid submission, as well as general administrative costs.
The development would establish South Dorset as one of only three hydrogen “cohorts” in the UK, combining production, substantial storage capacity, and trunk pipeline transmission capabilities. This integrated approach is expected to strengthen the project’s case for government revenue support through the HSBM scheme.