British coal-bed methane operator Island Gas (to be renamed IGas) is to raise £13.75m through an oversubscribed, fully underwritten placing at 60p. The deal will see Levine Capital Management increase its holding to 12.5 per cent and also increases the free float in the shares.
By increasing its interests in licences co-owned with partner Nexen, IGas will boost its resources by 38 per cent and acquire operatorship of the Point of Ayr licence, enabling it to accelerate that project. IGas currently sells electricity through a pilot production site and is targeting full commercial production in 2011. Chief executive Andrew Austin estimates the company's resources are sufficient to supply electricity to 7 per cent of all UK households for 15 years.
