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Oilex confirms acquisition funding

By BFN News | 02:00 PM | Wednesday 21 April, 2021


The board of Oilex Limited has arranged the funding required to complete the acquisition of GSPC's 55% participating interest (PI) in the Cambay PSC. This follows the announcement on 6 April 2021, in which, the company announced that GSPC had provided notification that it had approved the sale of its 55% PI in Cambay to Oilex for the purchase price of US$2.2 million. Following completion of the transaction, Oilex will hold a 100% participating interest in Cambay, and this will provide Oilex with the ability, subject to sourcing the necessary additional funding, to restart field work including a work programme, consisting of the drilling of two vertical wells to appraise the Eocene gas accumulation. Completion of the transaction will require the finalisation of a binding sales and purchase agreement with GSPC, and the Government of India's approval for the transfer of GSPC's PI to Oilex. The company is considering various funding options for the drilling program including potential farm-in partners. To this end, several parties have expressed interest to the company in farm into Cambay and it will consider its options in the ordinary course with due regard to the best interests of its shareholders. In order to satisfy the acquisition consideration, the company has arranged an equity capital raising, with existing sophisticated shareholders and clients of Novum Securities Limited, of £2.4 million (A$4.3 million) through the issue of 1,008,403,361 new ordinary shares at GBP 0.238 pence (0.425 AUD cents) per share. The subscription will be completed in two tranches will each subscriber participating in Tranche 1 and 2 on a pro-rata basis: Tranche 1 will be 405,000,000 ordinary shares issued at 0.238 pence for £0.964 million under the company's existing ASX LR7.1 capacity. Completion of this equity issue is anticipated in early May 2021. The second tranche is 603,403,361 ordinary shares issued at 0.238 pence for £1.436 million subject to shareholder approval being obtained. Completion of this equity issue is anticipated in late May 2021. In addition, each ordinary share issued as part of Tranche 2 will also be issued with one share option, resulting in the issue of an aggregate of 603,403,361 options. The options are exercisable at 0.476 pence per share on or before 30 June 2022. The issue of the options is also subject to shareholder approval anticipated in late May 2021. Funds raised from the subscription are intended to be applied to the acquisition cost of GSPC's PI, development of the company's plans to undertake a drilling and testing appraisal program and the company's working capital base. Managing director of Oilex, Joe Salomon, said: 'Oilex is very pleased to have received strong financial support from its long-term shareholders to complete the acquisition of GSPC's interest in Cambay. The proceeds will be applied firstly for the purchase of GSPC's 55% PI and secondly to support the development of Oilex's plans to undertake a drilling and testing appraisal program aimed directly at establishing gas flow rates from the known gas resource in the EP-IV formation in the Cambay PSC. 'The ultimate aim of the Cambay project is to confirm high gas rate production which can be aggregated through an ongoing drilling program and where the gas can be sold into India's high-pressure pipeline system. While this project has been delayed through unavoidable circumstances including the COVID situation in India, the Company is now at a very positive point, with a strong team to oversee the re-start of activities.' At 2:00pm: (LON:OEX) Oilex Ltd share price was 0p at 0.07p Story provided by StockMarketWire.com

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