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(Alliance News) - Zenith Energy Ltd on Friday said it has raised cash from a shareholder at a 5.3% premium to help continue work across its portfolio.
Zenith has also agreed an equity sharing agreement which will see it raise over GBP800,000.
Zenith has issued 9.0 million new shares to an unnamed existing institutional shareholder, as well as some high net-worth private individuals, to raise GBP135,000. The shares were issued at 1.5 pence, a 5.3% premium to its closing price on Thursday in London.
Shares were 1.8% higher on Friday morning at 1.45p apiece.
"The proceeds of the financing will be used to provide additional funding for the development of Zenith's production portfolio, the identification and acquisition of new oil and gas production assets, as well as for general working capital purposes," said Zenith.
Regarding the equity sharing agreement, a consortium of institutional investors have signed up for 50 million new shares at NOK0.194, raising around NOK9.7 million, or GBP810,000.
Zenith currently has an outstanding liability of USD1.1 million from a USD2.5 million convertible loan, and the proceeds of the equity sharing agreement will partly go towards paying this off.
Chief Executive Andrea Cattaneo said: "It is encouraging to see continued support from large, existing UK institutional shareholders as well as renewed investment from our institutional lenders.
"We expect the proceeds of the equity sharing agreement to provide additional funding for our activities into 2021, as well as help us to reduce our convertible debt exposure. The innovative mechanics of the equity sharing agreement are expected to enable Zenith to potentially benefit significantly from future share price appreciation."
Zenith currently has operations in both Azerbaijan and Italy, but also also recently acquired assets in the Republic of the Congo from fellow London-listed firm Anglo African Oil & Gas PLC.
By George Collard; georgecollard@alliancenews.com
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