LONDON (Alliance News) - LGO Energy PLC on Wednesday said it has raised GBP3.3 million in an institutional fundraise, and noted it has agreed a new indicative repayment schedule with bank BNP Paribas for its outstanding loan.
The oil producing company operating in Trinidad and Spain said it has placed 1.63 billion shares at a placing price of 0.2 pence per share, raising the GBP3.3 million, which it said will be used as working capital.
As a result of these funds being raised, LGO said it has reached an agreement with all the material trade creditors outstanding from the 2015 drilling campaign in the Gouldron Field in Trinidad.
In a separate development, LGO said it has agreed with BNP Paribas, which acts as its banker, a new repayment schedule for its outstanding loan, reducing the outstanding loan liability to USD4.9 million by offsetting the funds previously frozen by BNP Paribas as security.
LGO said the liability will now be met over the remaining life of the loan until September 2017 at an average rate of USD286,000 per month, which is around 50% of the previous rate of repayment.
Payment of the May 2016 installment is being made against the new agreed schedule, LGO added.
LGO said it continues to explore ways to further restructure the liability such that the current default on covenants can be fully remedied. The company now intends to embark on discussions, which "it is hoped will lead to earlier repayment of the balance of the loan with BNP Paribas".
As a result of the progress being made LGO said it "wishes to confirm that the non-binding term sheet for a USD2.00 million convertible loan as announced on February 24 is no longer being pursued".
"The board are pleased to have secured institutional backing to address the remaining trade creditors from the 2015 drilling campaign at Goudron. Well recompletion work is now underway to raise production and is showing encouraging results. The company's primary focus is on clearing all creditors and to increase production, and then to proceed to the drilling of the previously announced Goudron Sandstone well program as soon as practical," said LGO Chief Executive Neil Ritson.
Shares in LGO closed up 1.8% at 0.280 pence on Wednesday.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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