Prospex Oil and Gas Plc (LON:PXOG) shares opened Tuesday’s trading around 19% lower as investors reacted to news of a new £800,000 equity raising.
The early stage, Romania focused energy company revealed it is selling 400mln new shares to new and existing investors in a placing arranged by broker Novum Securities, with the new shares priced at 0.2p each.
It intends to use the funds to help cover the company’s share of costs for the 2019 work programmes at the Suceava Concession - a project that has now been enlarged, and, will include the drilling of the Bainet West exploration prospect.
In a separate statement, Prospex revealed it had been awarded the expansion area.
Prospex also told investors that the existing Bainet-1 well is currently performing in line with expectations, after a six month period of production, and, the joint venture partners now anticipate an average production rate of 15,000 cubic metres of gas production per day over 2019.
Chairman Bill Smith said: “Having participated in two successful wells in Romania and Italy in the last 18 months, we are keen to participate in drilling activity again and Bainet West represents an excellent opportunity for the partners to do just that.
“Based on our experience with the Bainet field - with a less than a year cycle between drilling and production start-up and, subject to a successful outcome, Bainet West has the potential to be brought into production within a similar timeframe.
“This is fast by industry standards and demonstrates the value of the Suceava Concession, where the presence of multiple copycat structures offers a low-risk opportunity to build a cash generative project for relatively low capital outlay.”
In early deals, Prospex shares were changing hands at 0.2p, down 19.6%.