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Junior oiler Cabot Energy raises US$0.5mln from majority shareholder

High Power Petroleum has subscribed for another 4.34mln shares at 9.25p apiece – the same as yesterday’s closing price
dollars
Once the transaction completes, H2P will have a 66.2% stake in Cabot

Canada-focused oil and gas Company Cabot Energy PLC (LON:CAB) has raised US$0.5mln from its major shareholder, High Power Petroleum (H2P).

H2P has subscribed for another 4.34mln shares at a price of 9.25p each – the same as yesterday’s closing price.

The additional investment will take H2P’s overall stake in Cabot to 66.2%.

READ: Cabot agrees working capital deal with majority shareholder

Cabot said the proceeds would be used for working capital purposes and to settle amounts owed to trade creditors in Canada.

The subscription also generates sufficient funding to see the Company through to the end of August.

“We are pleased to secure further funding at the prevailing market price from our supportive majority shareholder, H2P,” said interim chairman James Dewar.

“On behalf of the board, I would like to thank H2P for the continued support at this crucial time as Cabot continues to advance discussions for asset-level debt financing which will enable the Company to fund its scheduled work programmes in Canada for the remainder of 2019.”

Other financing discussions 'progressing'

As Dewar mentioned, Cabot has engaged a specialist financial advisory firm to source Canada asset-level debt financing to ensure full funding to commence its work programme through to the end of 2019.

Discussions are progressing and bosses “reasonably expect” to finalise an agreement in the current quarter.

As well as the latest subscription, H2P has indicated that, pending the outcome of the asset-level financing discussions, it would consider providing additional equity funding if needed.

Cabot shares were up 2% to 9.45p in late-afternoon trading on Wednesday.

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