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Placing, update on activities in Mexico and US operations Update
Northcote (LSE:NCT) has announced that it has raised £2.80million via the issue of 1,244,444,444 new nil par value ordinary shares at 0.225 pence to new and existing investors.
The proceeds of the Placing will be used primarily to pursue investment opportunities in the Mexican energy sector and for general working capital.
Overview
* Placing to expedite participation in the extensive opportunities in the
Mexican energy sector which is being opened up to international companies
* Multiple projects currently being evaluated in Mexico both within the
Company’s joint venture with Gaia Ecologica (“Gaia”), a local Mexican
company, as well as through its own contacts
* Whilst nothing formal has been agreed at this stage, due diligence is
underway on an opportunity to participate in a JV to construct and operate
a waste remedial plant in a prime onshore oil and gas basin in Mexico –
this could offer a low cost opportunity to generate cash flows in the near
term and has potential for expansion in line with expected increase in
drilling activity
* Advanced discussions with US-based companies with experience in midstream
and downstream oil and gas services with a view to partnering in their
expansion into Mexico
* 70% owned Shoats Creek well expected to spud within the next 10 days
following receipt of drilling permit
Northcote Managing Director Randall Connally said, “We would like to thank our existing and new shareholders for their show of support in this fundraise. The financial firepower we now have gives us the flexibility to takedown new business opportunities in Mexico. In addition to generating near term recurring revenues and solid cash flows for Northcote these steps will solidify our position as a strong partner for Mexican and international companies in opportunities emerging through the energy reform in Mexico and will, we believe, lead to opportunities across the sector, including participation in lucrative oil & gas concessions as well as other major projects in the future.
“At the same time we are pleased to have been notified by the operator of Shoats Creek that we have received a new permit for the first new drill well on that property. Preparations for the drill are underway and we expect to execute our drilling plan very soon. A further update once we have spudded this well will be provided in due course.”
Details of the Placing
The Company has raised £2.80million (before expenses) in new equity to further its pursuit of opportunities arising from the deregulation of the Mexico energy sector.
The Placing Shares represent approximately 20.77 per cent. of the Company’s issued share capital as enlarged by the Placing Shares. The Placing Price is at a discount of approximately 18.2 per cent. to the closing middle market price on 1 May 2015, being the last practicable date prior to the publication of the announcement. The Placing is conditional, inter alia, on admission of the Placing Shares to trading on AIM.
It is expected that admission of the Placing Shares to trading on AIM will be admitted to trading at 8.00 a.m. on 11th May 2015. The Placing Shares will rank pari passu in all respects with the Company’s existing Ordinary Shares. Following the issue of the placing shares as described above, the issued share capital of the Company will consist of 5,992,582,327 Ordinary Shares.
In connection with the Placing, the Company has issued 90,750,000 warrants to its brokers to subscribe for new shares in the Company exercisable during three years from Admission, at a price of 0.225p per share.
