MYN.L Share News (MYN)

(ShareCast News) - Oil and gas company Mayan Energy announced on Friday that it has completed a placing of 7,246,376,812 new ordinary shares of no par value each, at a placing price of 0.01725p to raise gross proceeds of £1.25m.The AIM-traded firm said the funds raised will be used to start oil and gas production from four re-entry wells, including LM 19 and LM 13, as well as RC1 and RC2.It said the impact of the four additional wells coming on stream, based on initial flow rates as previously announced, is expected to significantly increase oil and gas production to Mayan.Mayan has a 70% working interest and a 52.78% net revenue interest in RC 1, RC2 and LM 13, and a 20.00% working interest and 15.08% net revenue interest in LM 19.Funds will also be used to meet immediate financing needs and for general working capital purposes, the board added.At the same time, Mayan updated the market on Shoats Creek production, saying the delivery of the down-hole pump for the LM 20 well is now due, and the company will report on sustainable flow rates after the first week of production.Mayan has a 70% working interest and 52.78% net revenue interest in LM14, which will be the first to be brought on line.Commenting on the above, Mayan's CEO said:"With this raise under our belt, we can move rapidly towards creating a five to six well operation," said Mayan CEO Eddie Gonzalez."So, in just three months since joining Mayan in September 2016, we will have moved from being an a one well exploration and development play, to a five to six well producer and, with the costs cuts the company has introduced, we are poised to generate sustainable cash flow to cover our operational needs."Gonzalez said as well as increasing production, an additional benefit of the investment is that the company will also reduce its operational risks in terms of our overall sensitivity to the performance of any given well."We now have the firepower to really push ahead, and more than ever, I am focused on our game plan."The new wells represent a very achievable milestone, following which we will really be on the way to exploiting the considerable potential to add value I see in Shoats, which include additional lease acquisition, as well as re-entry and new drill opportunities."Gonzalez said he was also looking forward to reporting on progress in achieving the board's plans to monetise some of its non-core assets, and its plans for Mexico."The many opportunities associated with that country's energy reforms still remains central to our long term vision for Mayan."