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Bahamas Petroleum mulling funding options as share price languishes
3rd Oct 2019 11:07
(Sharecast News) - Oil and gas exploration company Bahamas Petroleum noted the latest movements in its share price on Thursday, and continued speculation pertaining to an imminent potential fundraising transaction by way of an equity placing to institutional investors.
The AIM-traded firm, whose shares had surged and subsequently fallen back in the last five weeks, confirmed that it had no immediate intention of undertaking an equity placing to institutional investors.
As it had stated in various announcements in August and September, it had multiple funding options available to it to fund the exploration well intended to be drilled in the first half of 2020, which would provide shareholders with exploration exposure to risked resources between 0.4 and 1.2 billion barrels of oil, with a potential upside in the targeted structure that had been independently assessed at close to four billion barrels of oil.
"The company has consistently stated that it will work in a coordinated way toward selection of a financing package that the board considers to be in the best interests of the company and its shareholders," the board said in its statement.
"To this end, at the company's annual general meeting on 17 September, shareholders passed a number of special resolutions designed to provide the board with the flexibility to enter into a range of possible funding arrangements to secure the funding for the initial exploration well, including the approval of a conditional convertible loan note agreement for the provision of £10.25m in well finance."
In that context, in recent days the firm had met with a number of potential institutional investors as it considered its funding strategy.
However, the board said it considered that the current share price of the firm "materially undervalued" the project, and thus raising equity by way of a private placing to institutional investors at or below the current share price would not compare favourably with other options being considered by the firm, and as a result would not represent the best value proposition for the company's shareholders.
"The company continues to actively evaluate a range of funding options, and active farm-in discussions continue.
"The company remains confident it will implement a suitable financing package which will provide access to funding as and when required for drilling and drilling related activities, and which is linked to the provision of a rig and access to integrated well services from a collaboration of major international companies will enable drilling to commence as intended in the first half of 2020.
"The company will make further announcements as appropriate in due course."
The AIM-traded firm, whose shares had surged and subsequently fallen back in the last five weeks, confirmed that it had no immediate intention of undertaking an equity placing to institutional investors.
As it had stated in various announcements in August and September, it had multiple funding options available to it to fund the exploration well intended to be drilled in the first half of 2020, which would provide shareholders with exploration exposure to risked resources between 0.4 and 1.2 billion barrels of oil, with a potential upside in the targeted structure that had been independently assessed at close to four billion barrels of oil.
"The company has consistently stated that it will work in a coordinated way toward selection of a financing package that the board considers to be in the best interests of the company and its shareholders," the board said in its statement.
"To this end, at the company's annual general meeting on 17 September, shareholders passed a number of special resolutions designed to provide the board with the flexibility to enter into a range of possible funding arrangements to secure the funding for the initial exploration well, including the approval of a conditional convertible loan note agreement for the provision of £10.25m in well finance."
In that context, in recent days the firm had met with a number of potential institutional investors as it considered its funding strategy.
However, the board said it considered that the current share price of the firm "materially undervalued" the project, and thus raising equity by way of a private placing to institutional investors at or below the current share price would not compare favourably with other options being considered by the firm, and as a result would not represent the best value proposition for the company's shareholders.
"The company continues to actively evaluate a range of funding options, and active farm-in discussions continue.
"The company remains confident it will implement a suitable financing package which will provide access to funding as and when required for drilling and drilling related activities, and which is linked to the provision of a rig and access to integrated well services from a collaboration of major international companies will enable drilling to commence as intended in the first half of 2020.
"The company will make further announcements as appropriate in due course."