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Europa Oil & Gas (LSE:EOG) have announced a detailed placing and open offer to raise approximately £4 million.
The funds will be used to drill an additional well onshore UK in 2014; to advance the Company’s Irish Atlantic Margin licences where it partners with Kosmos Energy; and to participate in the next Irish Licensing Round.
Highlights:
• Fundraising to raise up to approximately £4.0 million, of which a minimum of approximately £3.02 million has been raised in the Placing and pursuant to Directors’ undertakings to participate in the Open Offer
o Placing to new and existing institutional investors to raise approximately £2.86 million (gross)
o Intention to raise up to a further £1.16 million (gross) via the Open Offer to Qualifying Shareholders
o Directors have undertaken to make applications to subscribe, in aggregate, for 2,666,665 Open Offer Shares to raise approximately £160,000
• Placing and Open Offer undertaken to provide requisite financing for Europa’s near-term work programme, including:
o Expected drilling of an exploration well at Kiln Lane, PEDL-181, onshore East Midlands, UK
o Furthering its work in Ireland, both in respect of the Company’s existing interests in two exciting exploration licences, but also participating in the next licence round
o Farm-out costs and initial well planning at the Berenx Shallow prospect, onshore France
• Full details of the Open Offer, including its terms and conditions, will be announced on or around 19 December 2013 and set out in the Circular to shareholders to be posted on or around the same date
o Company expects advance assurance, given previously, that the Open Offer Shares would satisfy the requirements for tax relief under EIS and VCT Schemes (renewed advanced assurance from HMRC is pending)
Europa is pleased today to announce that it has conditionally raised £2.86 million (before expenses) by the issue of 47,694,665 New Ordinary Shares pursuant to the Placing and, furthermore, that it proposes to raise up to a further £1.16 million by the issue of up to a further 19,332,855 New Ordinary Shares pursuant to the Open Offer, in each case at an issue price of 6 pence per New Ordinary Share. The Placing is conditional upon, inter alia, First Admission becoming effective on 9 January 2014 or such other date as may be agreed between the Company and finnCap, such date to be no later than 31 January 2014.
The fundraising has been undertaken to provide funding for Europa’s near-term work programme and projects, including funding the Company’s contribution to expected drilling of an exploration well at Kiln Lane, PEDL-181, and to further its work in Ireland, including the commissioning of a CPR on its existing assets in the region.
Europa’s CEO Hugh Mackay said:
“This successful Placing shows the potential of our balanced portfolio of high impact exploration offshore Ireland and onshore France prospects; and low risk exploration and production onshore UK assets, to create substantial value for our shareholders. In line with this, I am encouraged that some blue chip institutions have chosen to become shareholders. The Board is at all times mindful of its responsibilities to existing shareholders and as a result, the decision has been made to initiate an Open Offer to Qualifying shareholders to provide them with the opportunity to participate on the same terms as those offered to the institutions under the Placing.”
“Significantly, as a result of the Placing, we are now in a position to drill two exploration wells in the UK in 2014, each of which has a one in three chance of materially adding to our production. Revenues generated from our three producing fields in the UK will fund our share of drilling the Wressle prospect in early 2014, however the funds raised today will allow us to drill the Kiln Lane prospect on PEDL-18,1 which is located in a working hydrocarbon system where a number of discoveries have been made in adjacent licences.
“We estimate Kiln Lane has gross mean un-risked resources of 2.9mmbo and with a 50% interest and operatorship of the licence, we will be looking to drill a well in H2 2014. At the same time, we are now well funded to advance our plans to farm-out and drill the 416bcf (per Company estimates only) Berenx Shallow gas prospect onshore France, as well as fund our participation in the next Irish Licensing round, as we look to add to our two existing licences in the Irish Atlantic Margin where we are in partnership with Kosmos Energy. 2014 is shaping up to be an exciting year for Europa and I look forward to providing further updates on our progress in due course.”
