TIDMBPC
RNS Number : 2799S
Bahamas Petroleum Company PLC
05 November 2019
5 November 2019
Bahamas Petroleum Company plc
("Bahamas Petroleum" or the "Company")
Result of Placing, Open Offer and Funding Strategy Update
Highlights:
-- Open Offer closed with c.50% take-up from existing
shareholders raising gross proceeds of US$4.3 million through the
issue of 166.4m ordinary shares at a price of 2p each.
-- Successful Placing to raise additional gross proceeds of
US$7.1 million through the further issue of 275,641,455 ordinary
shares at a price of 2p each.
-- Aggregate gross proceeds of US$11.4 million from Open Offer
and Placing representing an oversubscription of 60% against
announced targeted fundraise amount.
-- As a result of the Open Offer, the Placing and the previously
announced Conditional Convertible Note, the Company expects to see
gross cash inflows of approximately US$24.6 prior to March
2020.
-- Sequenced cash inflows through 2019 and 1H 2020 expected to
be sufficient to meet the anticipated costs of an initial
exploration well in The Bahamas during 2020, consistent with
licence obligations, with timing of cash inflows matched to funding
requirements.
-- Farm-in discussions remain active, and the Company continues
to consider other financing alternatives, to strategically expand
its available funding resources.
Overview:
Bahamas Petroleum Company plc, the oil and gas exploration
company with a significant prospective resource in licences in The
Commonwealth of The Bahamas ("The Bahamas"), is pleased to announce
that it has raised US$7.1 million before expenses through a firm
placing of 275,641,455 new ordinary shares of 0.002p each
("Ordinary Shares") (the "Placing Shares") at a price of 2p each
(the "Placing). The Placing was undertaken via an accelerated
book-build process, as announced on 4 November 2020, with the
Company seeing strong demand and thus increasing the size of the
Placing from the initial targeted amount.
Together, the Placing and the previously announced successful
Open Offer, raised US$11.4 million before expenses representing an
oversubscription of 60% against the announced targeted placing.
The Placing comprises part of a coordinated funding strategy by
the Company toward the drilling of an initial exploration well in
The Bahamas during 2020. Other elements of this funding strategy as
announced to-date are:
1. An Open Offer to qualifying shareholders, as announced by the
Company on 18 October 2019 and closed for acceptances, in
accordance with its terms, at 11.00 a.m. on 1 November 2019 (the
"Open Offer"). The Company received valid acceptances and excess
applications from qualifying shareholders for a total of
166,402,235 new Ordinary Shares under the Open Offer. All excess
applications from qualifying shareholders will be met in full, and
in aggregate the Open Offer represented a c.50% take-up by existing
shareholders, raising gross proceeds of approximately US$4.3
million.
2. A Conditional Convertible Note Subscription Agreement,
entered into by the Company on 10 October 2019 (and as more
particularly described in the Company's announcement of that date -
the "Conditional Convertible Note"), whereby, subject to
satisfaction of various conditions precedent prior to 15 February
2020 in accordance with the terms of that subscription agreement,
the Company expects to raise an additional c.US$13 million.
When considered in aggregate, the proceeds of the Open Offer,
the Placing and the Conditional Convertible Note (assuming all
conditions precedent to the Conditional Convertible Note are either
satisfied or otherwise waived and the Conditional Convertible Notes
are fully subscribed, and assuming further that interest is
capitalised and all principal and capitalised interest is
ultimately converted) would result in approximately 1 billion new
Ordinary Shares being issued, and total funding inflows over the
next six months of approximately GBP19.1 million (approximately
US$24.6 million), with cash inflows matched to the timing of
operational requirements. The Company's present estimate of the
total cost for the drilling of the initial exploration well is in
the range of US$20 million to US$25 million.
Funding Strategy Update:
The Company considers that with the success of the Open Offer
and the Placing, and when combined with the Conditional Convertible
Note, it will likely have sufficient funds to undertake the
drilling of an initial exploration well in The Bahamas during 2020,
in accordance with the Company's licence commitments.
Moreover, in addition to the proceeds from these activities the
Company continues to pursue a farm-out as part of its overall
funding strategy, and has received proposals for, and continues to
develop and assess a number of other financing options. A decision
to enact any of these other financing proposals will be taken, if
required, based on the outcome of the farm-out process.
To the extent that a farm-out is successfully concluded on terms
acceptable to the Company, the amount of capital available to the
Company would likely materially increase, and would be additive to
the funds raised through the Open Offer, the Placing and the
Conditional Convertible Note. Such funding could be applied towards
all or a considerable portion of the costs in respect of the
intended drilling, or alternatively proceeds from any farm-out
could be applied to a broader work programme than the current
single well the Company intends to drill in 2020.
Shareholders should note, however, that there remains a degree
of uncertainty in relation to the Conditional Convertible Notes,
given that ultimate quantum of funding to be received is dependent
on the occurrence of future events outside of the control of the
Company. Specifically:
-- Funding from the Conditional Convertible Notes remains
subject to certain conditions precedent as set out in the
subscription agreement for the Conditional Convertible Notes first
being satisfied on or prior to 15 February 2020 (unless said
conditions are waived by the subscribers), and
-- the Company continues to work on securing a farm-out, which
if successful could likely materially increase the amount of
capital available to the Company, which could offset all or a
considerable portion of the costs in respect of the intended
drilling or alternatively provide funds in excess of that required
to complete the initial well, thereby potentially facilitating
further exploration activity on the licences including that of an
additional well.
In circumstances where suitable funds are not raised via the
Conditional Convertible Notes, or if a farm-out is not secured, the
Company would likely not have sufficient cash to complete the
drilling of the planned initial exploration well in 2020, which, in
turn, puts the Company at risk of not meeting its licence
obligations. In such circumstances the Company would look to secure
funding by way of alternative sources. There can be no assurance,
however, that the Company would be successful in securing any such
alternative funding.
Placing Summary:
The Placing will raise, in aggregate, $7.1 million before
expenses through the placing of, in aggregate 275,641,455 new
Ordinary Shares at a price of 2p per share (the "Placing"). The
Placing Shares to be issued will rank pari passu in all respects
with the Company's existing Ordinary Shares and will represent
approximately 14 per cent. of the Company's enlarged issued
ordinary share capital, following admission of the Placing Shares.
13.8 million unlisted warrants to subscribe for new Ordinary Shares
at the Placing Price per share for a period of 24 months are to be
issued to Shore Capital as part compensation for services provided
under the Placing. In addition, 5 million warrants to subscribe for
new Ordinary Shares at the Placing Price per share for a period of
24 months are to be issued to Strand Hanson Limited for corporate
finance advisory services in connection with the Open Offer and
Placing.
Application will be made for the 275,641,455 Placing Shares to
be admitted to trading on the AIM market of the London Stock
Exchange ("AIM") and it is expected that admission will take place
and trading in the Placing Shares will commence from 8:00am on 12
November 2019 ("Admission").
Total Voting Rights:
Following the Admission (and inclusive of the shares to be
issued pursuant to the Open Offer), the Company's issued share
capital will consist of 2,134,762,786 Ordinary Shares, with each
Ordinary Share carrying the right to one vote. The Company does not
hold any Ordinary Shares in treasury. This figure of 2,134,762,786
Ordinary Shares may therefore be used by shareholders in the
Company, as the denominator for the calculations by which they will
determine if they are required to notify their interest in, or a
change in their interest in, the share capital of the Company under
the FCA's Disclosure Guidance and Transparency Rules ("DTRs").
Working Capital:
The directors consider that the proceeds of the Placing and the
Open Offer, together with the Conditional Convertible Note (subject
to satisfaction or waiving of the outstanding conditions precedent)
and the Company's existing financial resources, will provide
sufficient working capital for its currently anticipated
requirements, including its planned exploration well, for at least
the next 12 months.
Simon Potter, Chief Executive Officer, commented:
"Our clear focus at Bahamas Petroleum is to drill an initial
exploration well on our highly prospective acreage in The Bahamas
during 2020, consistent with our obligations to the Government of
The Bahamas. We have been working diligently to develop a
coordinated funding strategy so as to ensure we have access to the
funds necessary for drilling, as and when we need them. I am thus
extremely pleased to advise all shareholders of our successful Open
Offer and Placing, which, in aggregate, have raised approximately
US$11.4 million. When combined with the proceeds we expect to
receive from our Conditional Convertible Note, we will have secured
the finance required for drilling activities, given our anticipated
well cost is in the range of US$20 million to US$25 million. At the
same time, we continue to maintain our cost focus, monitor a range
of additional funding options, and progress our farm-in process,
all with a view to strategically enhancing the overall financial
capacity of the Company, whilst not being reliant on any particular
outcome for drilling activities to be implemented.
I would like to thank existing shareholders for their continued
support, commitment to the project and confidence in the ability of
management to deliver on their behalf. The path taken to this point
has not been straightforward but collectively we have stayed
focused so as to realise the Company's goal - the management team
understands the responsibility it bears and is determined to
succeed. I also take this opportunity to welcome our new
shareholders and I look forward to updating you all on our progress
over the next six months as we ramp up for drilling operations. We
strongly believe it will be an exciting time for our Company."
For further information, please contact:
Bahamas Petroleum Company plc Tel: +44 (0) 1624
Simon Potter, Chief Executive Officer 647 882
Strand Hanson Limited - Nomad Tel: +44 (0) 20
Rory Murphy / James Spinney / Jack 7409 3494
Botros
Shore Capital Stockbrokers Limited Tel: +44 (0) 207
Jerry Keen / Toby Gibbs 408 4090
CAMARCO Tel: +44 (0) 20
Billy Clegg / James Crothers 3757 4983
www.bpcplc.com
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
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END
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