23rd Nov 2015 16:04
LONDON (Alliance News) - Northcote Energy Ltd on Monday said it has raised GBP750,000 by placing 833.3 million new shares at 0.09 pence each, with the funds to support initiatives at Shoats Creek and the Mexico bid round.
Shares in Northcote were down 20% at 0.0884p on Monday afternoon.
In addition, the company said progress is being made to sell down its Oklahoma portfolio to streamline operations, with proceeds to develop the Shoats Creek project in Louisiana, US.
Subscribers to the placing have been awarded one three-year warrant with a strike price of 0.15p for every two placing shares issued, according to the AIM listed energy company, equating to warrants over 416.7 million shares.
"The placing demonstrates support for our development plans at Shoats Creek and will enable Northcote to maximise production from the LM20 and prepare the field for future drilling at Shoats Creek in early 2016," Managing Director Randall Connally said in a statement.
"The success of the LM20 well demonstrated the potential of Shoats Creek, and we are therefore keen to advance our plans to realise the field's company-making credentials," Connally said.
The managing director said that Shoats Creek represents an excellent opportunity for Northcote to "rapidly deliver" positive cash flow generation, even if oil prices remain at their currently depressed levels or if they go lower.
Connally said that completion of the infrastructure work will "increase the production capacity of our Frio infrastructure unit to up to 1,500 barrels of oil per day and allow future drills to be brought into full production in short order".
By Samuel Agini; [email protected]; @samuelagini
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