Oil and gas explorer WHL Energy has secured a $US4 million ($A5 million) funding commitment from New York-based Magna Equities to continue prospecting its African tenements.
WHL will be able to draw down in $US250,000 increments over a three-year term, with the funds to be used to support further exploration at its flagship Seychelles offshore project in Africa, and its La Bella project off Victoria.
“This is a sensible step for the company and its shareholders and will allow us to continue the ongoing work with the company’s existing assets and to advance work on new opportunities currently being reviewed,” WHL managing director David Rowbottam said.
“To have the backing of a respected US fund such as Magna at a time when the junior-end of the resources market is struggling to raise fresh equity is a tremendous vote of approval for both WHL and its existing assets.”
The facility is unsecured, bears no interest costs and can be repaid at any time by WHL with a 15 per cent premium.
It can also be converted into WHL shares at any time by Magna during the term, at a 20 per cent discount to the company’s five-day volume weighted average price.
Magna chief executive Joshua Sason said the fund was delighted to support the development of the Seychelles and Australian oil and gas assets.
“This investment marks our continued effort to build lasting and mutually beneficial relationships with exciting companies in the Australian market,” hesaid.
WHL shares lost 12.5 per cent of their value to 2.8 cents a share at 2pm.
