16th Mar 2020 14:34
(Alliance News) - Oilex Ltd has amended its current financing and agreed a new equity raise to bolster finances amid difficulties in the oil and gas sector caused by Covid-19.
Shares were 22% lower on Monday afternoon in London at 0.090 pence each.
Oilex has also decided against taking up an option to purchase a licence in the East Irish Sea.
Perth, Australia-based Oilex has extended the repayment date for an AUD250,000, about USD153,000, loan facility to July 31 next year from the previous date of April 1 this year. All other terms are the same, it said, with the interest rate 5% a year.
The loan, provided by 13% shareholder Republic Investment Management, is fully convertible into shares, meaning an AUD250,000 cash boost if this was to happen.
Elsewhere, Oilex is rolling GBP225,000 of a GBP350,000 loan into a new facility. The terms of this new GBP225,000 facility are unchanged, but the repayment date has been pushed back to the end of March 2021 from the start of August this year.
Oilex is also to place 227.3 million new shares to raise AUD500,000, which would be put towards working capital. Almost all of the shares will be taken by Republic Investment Management.
In December, the company signed a binding term sheet to buy the Doyle-Peel licence off the coast of the UK. It also signed a deal to buy another licence, Castletown.
However, Oilex will not be buying the Castletown asset, it said Monday.
Managing Director Joe Salomon said: "The current investment climate is highly volatile with limited availability of risk capital. Accordingly, it is imperative that the company acts decisively to strengthen its balance sheet and curtail its commitments.
"The proposed restructure of our UKCS acquisitions reduces our commitments while retaining our focus on our principal asset, the Cambay project. The company remains committed to the settlement of the Cambay dispute as agreed with its joint venture partner, currently anticipated to be completed in the June 2020 quarter."
Elsewhere, Oilex's interim loss widened to AUD2.0 million from AUD1.5 million the year before. The company did not record any revenue in the six months to December 31, due to the voluntary shut in of the Cambay field in the first quarter.
By George Collard; [email protected]
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