LONDON (Alliance News) - Prospex Oil & Gas PLC Wednesday said it has significantly increased its share capital after issuing GBP775,000 worth of equity through a heavily discounted placing so it can pursue new opportunities and hoard cash in case more work is needed at its asset in Poland.
The company said it issued 70.5 million new shares, equal to around 24.7% of the enlarged issued share capital, priced at a 17% discount from the closing share price on Tuesday at 1.1 pence.
Prospex shares were trading down 11% to 1.18 pence per share on Wednesday afternoon.
The company said the placing was oversubscribed and plans to use the proceeds for additional support work, "if required", at the Kolo licence onshore Poland, in which it holds a 49% stake, as well as provide scope to explore additional investment opportunities and for general working capital.
"The Kolo Licence represents an excellent first investment for Prospex and we were delighted with the appetite for this oversubscribed placing. The funds raised place the company in a strong position to reach further significant milestones in the development of this asset, as we continue to build a portfolio of high impact onshore and shallow offshore European opportunities with short timelines to production," said Non-Executive Chairman Bill Smith.
"With this in mind, we are evaluating other investments, specifically undervalued projects where low cost re-evaluation/re-working of historic exploration offer scope for tangible value trigger points and material value uplift for stakeholders within 12 months of acquisition," he added.
The holding company of Kolo has advised Prospex that it has signed a lease agreement with the owner of the land where the a well will be drilled in the fourth quarter of this year over the Boleshaw conventional gas prospect.
A four year lease has been agreed with options open to extend that term, as required as part of a producing gas development.
"The next steps will involve pad construction and the securing and mobilisation of the drill rig ahead of the commencement of drilling operations in the fourth quarter of 2016. Further updates will be provided to the market in due course," said Prospex.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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