LONDON (Alliance News) - MX Oil PLC shares dropped on Monday after it shuffled its board and said it is considering all of its funding options moving forward, including the potential to farm-down or sell its soon-to-be producing asset in Nigeria.
MX Oil shares were down 5.6% to 0.92 pence per share on Monday morning, having fallen earlier to 0.83p.
MX Oil has moved into Mexico after decades of a state-monopoly in the nation's energy sector, securing four out of the five onshore licences last month that it had targeted. MX Oil is working with its partner Geo Estratos, with the pair being awarded four concessions in the Veracruz region. Those concessions are Tecolutla, Ponton, La Laja and Paso de Oro.
On Monday, MX Oil announced numerous changes to its board as part of its strategy to build a leading oil and gas investment company, with MX Oil also expecting production in the near term from its other asset in Nigeria.
The most notable appointment was Nicholas Lee as MX Oil's new non-executive chairman, replacing Andrew Frangos with immediate effect. The company said Lee's background in both the natural resources sector and in corporate finance makes him "ideal for this role".
Non-Executive Director Nigel McKim has been promoted to chief operating officer of MX Oil, building on his previous experience working with the likes of miner BHP Billiton PLC.
MX Oil has also appointed Wilhelmus Burgers as the company's new technical director, which will be classed as an executive role. He has spent the majority of his career as a geoscientist with oil and gas giant Exxon Mobil Corp.
"MX Oil is entering a new phase in its development, one which requires a management team with first class technical experience and expertise to oversee our investments," said Chief Executive Stefan Olivier.
In addition to the board shuffle, MX Oil noted recent speculation about funding and the recent movement in the company's share price, and said it is considering selling down its stake in its Nigerian asset to raise funds.
"The directors note the recent share price movement and the speculation that the company is raising money at 1.0 pence, which is the nominal price of its ordinary shares. The directors wish to clarify that they are currently in dialogue with investors regarding a potential equity investment, alongside ongoing discussions for further debt investment as announced on December 16, 2015," said MX Oil.
On December 16, MX Oil had said it was in the process of structuring secured, convertible loan notes to raise up to GBP4.0 million.
"The company has also received expressions of interest from certain third parties seeking to acquire some or all of the company's investment in the underlying asset in Nigeria. These are being considered by the directors against the background of other financing options," MX Oil said Monday.
"The board believes, however, that the value of its investment in this project is potentially significantly greater than MX Oil's current market capitalisation but will consider all funding options to ensure that the asset is fully funded up to production," the company added.
The Aje field in Nigeria is expected to be producing before the end of the first quarter of 2015
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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