Africa-focused Pancontinental Oil & Gas NL has completed a bookbuild for a placement to investors to raise up to $879,800 (AUD 1.2 million) through the issue of up to 300 million fully paid ordinary shares in the company at an issue price of $0.0029 (AUD 0.004) per share (the placement).
In addition to the placement, the board of Pancontinental has also resolved to offer eligible shareholders the opportunity to participate in a share purchase plan (SPP) to raise up to $733,200 (AUD 1 million).
Funds raised pursuant to the placement will be used in conjunction with existing cash, for costs associated with the potential sale of a part interest in Namibia EL0037, other farm-out costs, business development, and for general working capital purposes and other payables (circa $293,280 or AUD 400,000 to BG Group).
Pancontinental CEO Barry Rushworth commented, “The key focus for Pancontinental at the current time is our Offshore Namibian Project – EL0037. Successful 3D and 2D seismic programs have recently been completed and processed at a cost to farminee Tullow Oil in excess of $30 million. Tullow Oil is itself negotiating with a potential farminee for drilling in EL0037 and, by end of March 2016, Tullow Oil needs to exercise its option to drill, following which Pancontinental would be free carried on a well with no caps.
“Given the quality and the value of the exploration undertaken to date and the considerable potential for oil in a number of prospects, Pancontinental is confident a decision to drill will be forthcoming and this will be of considerable value to PCL’s healthy free carried 30% position in EL0037," Rushworth added. "Pancontinental is also seeking to farm down part of its 30% interest for cash. The current placement and SPP strengthens Pancontinental’s position as we embark on a very important few months for the company.”
Settlement of the placement for up to 177.5 million shares is scheduled for Dec. 11 and is not subject to shareholder approval. This part of the placement falls within the company’s existing placement capacity under ASX Listing Rules 7.1 and 7.1A.
Subject to shareholder approval, directors of Pancontinental have committed to subscribe for $366,600 (AUD 500,000) in the placement. The company anticipates that it will seek such shareholder approval at a general meeting in early January 2016.
Hartleys Ltd. acted as broker to the offer in respect of the placement and SPP.