Oil and gas exploration play Pura Vida Energy will tap investors and financiers for up to $12 million, to fund the ramp-up of drilling activities at its newly-acquired Nkembe block, off the coast of Gabon, as well as retire short-term debts.
Pura Vida said it would raise the funds through an $8 million share placement, priced at 39 cents per share, and a new loan facility would provide between $3 million and $4 million.
Stockbrokers Hartleys Limited and RBS Morgans were joint lead managers to the placement.
The loan facility is unsecured, has a 20 per cent interest rate and is repayable within 12 months.
Pura Vida will issue between 1.5 million and 2 million options to its lenders, at an exercise price of 60 cents per share, as part of the loan arrangement.
Managing director Damon Neaves said the fundraising would place the company in a strong financial position.
“In addition to monies raised from the placement and the new facility, we recently farmed out the Mazagan permit, offshore Morocco, which secured funding of up to $US215 million for the upcoming drilling campaign at Mazagan, and $US15 million cash payable to Pura Vida on completion,” Mr Neaves said in a statement.
“Completion of the farm-out is on track for mid-year. The new funding will be applied to unlock the value of the newly acquired Nkembe block, offshore Gabon.”
The funds also pay off a $5 million short-term loan Pura Vida received in January, after acquiring an 80 per cent operating interest Nkembe block in January for $US9 million.
The block is surrounded by a number of producing oil fields and oil discoveries, including fields operated by international giants Tota, Petrobras, Shell and Mitsubishi, among others.
At 11:30AM, WST, Pura Vida shares were down 11.1 per cent, trading at 40 cents.
