Chariot Oil & Gas Limited (LON:CHAR) has confirmed that it is working on new funding arrangements which will allow it to add a new exploration well to its 2017 campaign.
It would test Prospect S, offshore Namibia, and it would be in addition to the 10% owned Rabat Deep exploration well, offshore Morocco, which will be drilled later this year by Eni.
READ: Chariot Oil & Gas working to benefit from historically low deep-water well costs ahead of busy 2018
The company, in a stock market statement, revealed that it is looking to raise approximately US$15mln via a share placing as well as €5mln in an open offer to existing shareholders.
Chariot said it expects to issue the new shares at the equivalent of 13p per share, which is a substantial discount to the share price prior to Friday’s closing share price.
"This fundraise will represent another major step forward for Chariot, and one which allows the company to participate in two giant-scale wells in this calendar year whilst capturing the bottom of the cost cycle for drilling,” said Larry Bottomley, Chariot chief executive.
“Success in either well would be transformational, and would also de-risk significant additional portfolio in the relevant licence.”
Focusing specifically on the exploration plans, Bottomley added: “We will continue to progress operations in Namibia to drill Prospect S in H2 this year to benefit from synergies with third-party operations, and, in combination with our other partners, we continue to support Eni in their operations on the RD-1 well in Morocco which is scheduled to spud in March 2018.”
On AIM, the Chariot share price fell 5.2p or 25.75% to trade just above 15p.
“We look forward to welcoming new investors and are grateful for the continuing support of existing shareholders who have the opportunity to participate through the open offer,” Bottomley said.
“We appreciate both groups for supporting Chariot in a very exciting near-term drilling programme as well as for the continued development of the company's broader portfolio in Brazil and our other permits in Morocco."