LONDON (Alliance News) - Prospex Oil & Gas PLC on Tuesday said it has raised GBP800,000 in a share placing to go towards drilling work in Romania.
Prospex has placed 400.0 million share placing at a price of 0.2 pence per share to fund work at the Suceava concession. Shares in Prospex were down 17% at 0.21p per share on Tuesday morning.
Following the placing, which was completed by Novum Securities Ltd, Prospex will have 1.61 billion shares in issue. Novum has been issued 8.1 million share warrants as compensation for its work.
Investment company Prospex also announced it has enlarged the exploration area of the EIV-1 Suceava concession to include the Bainet West prospect, a "lookalike" to the Bainet discovery which was successfully drilled in November 2017.
The enlargement was granted by the National Agency for Mineral Resources.
Prospex holds a 50% non-operated interest in the now enlarged 984 square kilometre concession.
Prospex is to reimburse Suceava operator Raffles Energy SRL 50% of the back costs from developing the prospect. This amounts to EUR125,0000 net to Prospex and is payable from production once a well is drilled in the new Bainet West area, for which new permits are required.
Prospex Non-Executive Chair Bill Smith said: "Based on our experience with the Bainet field, with a less than a year cycle between drilling and production start-up and, subject to a successful outcome, Bainet West has the potential to be brought into production within a similar timeframe.
!This is fast by industry standards and demonstrates the value of the Suceava concession, where the presence of multiple copycat structures offers a low risk opportunity to build a cash generative project for relatively low capital outlay."
Smith noted that, with the inclusion of its interest in the Podere Gallina licence in Italy, Prospex now "has a clear line of sight to a step up in production-based revenues".
Smith added: "This is an exciting period for Prospex, one in which we are confident the disconnect that has opened up between our market valuation and the value of our assets will begin to narrow. With this in mind, I look forward to providing further updates on our progress."
