UK explorer IGas Energy has said it plans to raise up to £23.08 million ($37.12 million) in a share placing to fund a pair of shale appraisal wells.

The AIM-listed explorer said it would place up to 24.3 million new ordinary shares at a price of £0.95.

Chief executive Andrew Austin said that the placing would allow the explorer to “further appraise our shale assets and augment value ahead of a potential farmout”.

He added that the pending $66 million acquisition of PR Singleton from Providence Resources – to be financed with some of the equity as well as cash and debt – would provide cash flow from oil production for future shale activities.

Citing the recent lifting of restrictions on hydraulic fracturing and establishment of a new UK unconventionals regulator, IGas Energy said that there was now “a supportive political and geological backdrop for shale gas” in the UK.

The explorer’s shale acreage is concentrated on the Bowland basin, but IGas Energy said it has also identified prospective shale horizons in the East Midlands and the Weald Basin.

This time last year, the explorer said it uncovered a “very significant shale section” during coal-bed methane (CBM) drilling at Ince Marshes onshore England.

A two-well shale appraisal programme is now planned including coring, logging and a flow test at an expected cost of up to £15 million ($24.1 million).