8th Jul 2015 07:28
LONDON (Alliance News) - Red Rock Resources PLC Wednesday said it has given notice to exercise its option to invest in West Africa-focused oil explorer Elephant Oil Ltd.
Red Rock will subscribe for 1.1 million new shares in in Elephant Oil, at a price of 25.3 pence each and an aggregate consideration of GBP275,000. It has also been granted the right to invest a further GBP412,500 at the same price per share within a six month period.
Elephant Oil holds a 100% interest in the production-sharing contract on Block B, onshore Benin, on West Africa's oil province the West African transform margin. The block covers 4,500 square kilometres, which is approximately two-thirds of the coastal basin, Red Rock said.
The mining and natural resource exploration company added that it has issued 689.5 million shares at 0.0475p each to raise gross proceeds of GBP327,500. 421.1 million shares represent a GBP200,000 subscription by Elephant Oil, which following the subscription will hold 7.9% of Red Rock's enlarged issued capital. The remaining 268.4 million shares have been placed with institutional and private investors, it said.
Shares in Red Rock were down 20% to 0.052 pence on Wednesday morning, one of the worst performers in the AIM All-Share.
The proceeds will be used to fund Red Rock's investment in Elephant Oil and general working capital.
"Following continuing discussions with Elephant, Red Rock has determined to press forward with its investment in Elephant's oil exploration activities in West Africa, and consequently to undertake the current funding exercise. We consider that the Elephant team is making rapid progress in working to expand its footprint and add further oil opportunities in West Africa and our own exploration activities in Ivory Coast have given us a strong conviction of the economic prospects and investment merits of the region, as well as of its geological prospectivity," Chairman Andrew Bell said in a statement.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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