Cabot Energy tumbles ahead of proposed fundraising

(Sharecast News) - Oil and gas outfit Cabot Energy is in the process of wrapping up discussions with High Power Petroleum and other significant shareholders regarding an equity fundraising of roughly $3m.Cabot plans to use funds raised to settle its overdue Canadian trade creditors and certain creditors in the UK, as well as providing short-term working capital in the first quarter of its trading year.The AIM-listed firm said it was "confident" that a minimum of $700,000 in discounts to its overdue payment could be secured, representing approximately 17% of its total Canadian debt.Looking forward, Cabot believes cash balance of $500,000 will be "sufficient to maintain operations until the receipt of the proceeds of subscription funds in February."Cabot also noted that it would look to the market again early in the second quarter to seek further debt and equity funding.Cabot said: "The directors are reasonably optimistic that the company can raise debt and additional equity funding from existing and new shareholders, as it has done in the past, but it is not wholly within the company's control and as such represents a material financial uncertainty.""Failure to complete a first fundraising in February 2019 would cast significant doubt upon the group's continued ability to operate as a going concern."As of 0910 GMT, Cabot shares had tumbled 13.68% to 0.41p.