(Alliance News) - Baron Oil PLC on Friday said it has raised GBP2.5 million via a conditional placing and subscription of 2.50 billion new shares at a price of 0.1 pence each.
The fundraise consisted of 2.44 billion placing shares and 57.5 million subscription shares, with the 0.1p per share price representing a 58% discount to its 0.24p per share Thursday closing price. Turner Pope Investments Ltd acted as sole placing agent.
Shares in Baron were down 46% at 0.13p in London on Friday afternoon.
The placing's proceeds are intended to fund Baron's share of the Chuditch production sharing contract work programme in offshore Timor-Leste.
The Chudich PSC's gross estimated mean gas in place is 2.320 trillion cubic feet with gas recovery potential predicted to be between 55% and 75%, around 1.276 trillion to 1.740 trillion cubic feet. Baron considers this estimate to be prospective resources compliant but not SPE PRMS compliant.
The money will also go toward the drilling of the El Barco-3x well in Peru later this year and provide additional working capital to Baron. The El Barco-3x well has, Baron noted, a "compliant unrisked recoverable prospective resources of 8.5 million barrels of oil recoverable from the higher risk Amotape Basement and 14.7 billion cubic feet of gas recoverable from the low risk, shallower Mancora Sand."
Executive Chair Malcolm Butler said: "The board is pleased that this fundraising has been completed successfully, albeit at a significant discount to recent share prices.
"We continue to be very excited by the potential value that can be realised through our investment in SundaGas (Timor-Leste Sahul) Pte Ltd, parent company of the operator of the Chuditch PSC, in the initial phases of seismic reprocessing and thereafter through an appraisal and exploration drilling programme. We also have provisional plans to drill the low-cost, low risk El Barco-3x well in Peru which offers the potential for significant value on discovery."
Managing Director Andrew Yeo subscribed for 50.0 million shares, taking his total shareholding to 106.3 million shares or a 2.4% stake. Non-Executive Director Jon Ford subscribed for 7.5 million shares - his entire holding and a 0.2% stake.
By Anna Farley; firstname.lastname@example.org
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