9th Jul 2015 16:26
LONDON (Alliance News) - Savannah Petroleum PLC Thursday said it will raise GBP23.4 million through the placing of shares to enable the posting of a bank guarantee with the government of Niger in relation to its planned acquisition of the R3/R4 production sharing contract in south-eastern Niger.
The oil and gas company said the placing will be conducted through a bookbuilding process after which the placing price will be agreed.
A first tranche of 43.8 million shares will be issued on or by July 13, and the net proceeds are expected, along with the company's existing cash resources, to enable it to post a bank guarantee with the government of the West African country to enable payment of the USD31 million expenditures for R3/R4.
A second tranche will be issued on or before August 3, and the funds will be used to replenish the company's cash resources to be used for general working capital purposes. Savannah did not say how many shares would be issued in the second tranche.
"The planned acquisition of the R3/R4 PSC Area represents a landmark transaction for Savannah. Assuming award, following completion we expect to have licensed approximately 50% of the area we refer to as the Agadem Rift Basin. I believe this award would therefore place our company in a strong position going forward, given the unique scale, favourable risk profile and cost structure of our acreage," Chief Executive Andrew Knott said in a statement.
Shares in Savannah were untraded on Thursday at 38.00 pence. Its announcement was made after the market close on Thursday.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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