LONDON (Alliance News) - Independent Resources PLC Friday said it is looking to raise up to GBP2.8 million before expenses through a placing and open offer, money it will use to develop the Ksar Hadada onshore oil permit in Tunisia that is key to its survival.
In a statement, the company said it will issue up to 91.9 million new shares at 3 pence each.
Independent Resources is set to become the operator of the Ksar Hadada permit, a move that will turn it into an oil and gas producer. It will take an 86.3% working interest in the permit.
"It will be necessary for the group to raise further capital to allow development of this exciting opportunity and in anticipation of the approval of the extension of the Ksar Hadada Permit ... and to provide funds to prepare for the agreed work programme for the permit," the company said.
Charles Stanley will place up to 59.2 million shares with investors, and a further 41.7 million shares will be made available in the open offer, allowing the company's other existing investors to take part.
The company said the funds will be used to meet the preparation costs for re-entry of an existing well on the Ksar Hadada permit, cover the costs of preparing to become the operator and preparing for a seismic programme, cover working capital requirements, and advance its other business opportunities.
In a trading update, the company said it expects to report a pretax loss of about GBP3.4 million for the 15 months to December 31, 2013. It didn't earn any trading revenue in the period. Its cash balance had fallen to GBP663,000 by the end of December, and was down to about GBP408,000 at the end of March.
It warned that if the capital raising isn't approved by its shareholders, it might not be able to continue as a going concern unless it can find other funds to allow it to progress the Ksar Hadada permit.
The company's other assets are in Italy, but it is considering its strategic options for these.
It is having to reorganise its Rivara Gas Storage operations in the country after the site's environmental impact assessment approval was denied at a local level following residential complaints following an earthquake in May 2012. Independent Resources spent GBP1.5 million in costs during its last financial year contesting the decision.
It also has two coal bed methane permits in Tuscany.
"The timescale for consideration of Rivara is lengthier due to the key appeal processes in the Italian Courts which IRG expect to commence later this year. In terms of the Fiume Bruna and Casoni permits the company will be re-evaluating its position over the next several months with a view to deciding the best course of action and is formally discussing options with the relevant authorities at national, local and regional governmental levels to ensure alignment of relevant parties' interests,2 it said in a statement.
The company's shares were down 28.4% at 4.298 pence early Friday, the biggest decline on AIM.
By Steve McGrath; stevemcgrath@alliancenews.com; @SteveMcGrath1
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