LONDON (Alliance News) - MX Oil PLC on Monday said it has raised GBP2.5 million through a share placing and has issued further warrants.
MX Oil said it has issued 333.3 million shares at 0.75 pence under the placing. Shares in the company were down 27% to 0.82p early Monday.
The funds from the placing, which was oversubscribed, will be used to make what the company expects to be the final payment in connection with its investment in Nigeria prior to oil production starting.
In addition to the placing, MX Oil will issue 66.7 million warrants to its broker and certain other parties.
"We felt that it made sense to avoid any timing risk with regard to the funding of our Nigerian investment prior to it commencing production by ensuring that we had our own funds in place in order to make this payment," said MX Chief Executive Stefan Olivier.
MX Oil said it had raised the funds to ensure the timetable bringing the Nigerian project into production can be met.
MX is expecting to get the funds from GE Petroleum Development Co Ltd, which has acquired the Nigerian investment from MX, on Monday, but said it was "prudent to have its own funds in place" to ensure the timetable ahead of first oil at the Nigerian project is met.
"We will update the market shortly with regard to the funds expected from GPDC and also on the progress being made in Mexico," he added.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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