Cove Energy (LON:COV) is set to raise £110 million to help it pick up the pace of its Mozambique joint venture with US oil major Anadarko Petroleum (NYSE:APC).
After its recent discoveries in the Rovuma Offshore Area 1 the joint venture plans to accelerate exploration and appraisal drilling, as well as seismic work.
The company said the fundraising would be sufficient to cover the anticipated cost of the exploration program, as well as further exploration offshore Kenya and other new ventures.
“The new funds will ensure that Cove is adequately financed allowing the company to continue the successful high impact exploration and appraisal deepwater drilling,” chief executive John Craven said.
“Our ability to attract such significant new equity is testament to the strategy implemented by the board which has yielded a portfolio of quality assets that now contain major gas discoveries at Windjammer and Barquentine and the first oil encountered, offshore East Africa, at the Ironclad well.”
Cove will issue 144 million new shares at 76 pence each, around a 4 percent discount.
Additionally, the company reported that drilling operations have begun on the fifth well of the current programme in Mozambique.
Lagosta 1 is around 16 miles south of the recently announced Barquentine discovery.
In October Anadarko reported a significant natural gas discovery in the Barquentine exploration well.
Barquentine was the second discovery in the Rovuma Basin, after the Windjammer gas discovery back in February 2010.