Trading in Xtract shares will resume today, after having been suspended at the company’s request in late June, when the group announced it had received “unexpected additional cash calls” from Noreco, the operator of the Luna well in Denmark, related to cost overruns on drilling.
Since then, Xtract has paid the cash calls in full and negotiated with Noreco a reduction in the 2012 work stream as well as a more manageable payment schedule.
In a statement today, Xtract said Tiger Resource Finance and several board members of the investment group have agreed to subscribe for 689.66 million new Xtract shares at 0.0435 pence, raising approximately £300,000. The holding will represent 29.9 percent of the enlarged capital.
In addition, independent investor Aaron D'Este will take just under 69 million shares at the same price for £30,000. His stake will be 2.99 percent.
Following the subscription, Xtract chairman Dr George Watkins and non-executive director Jeremy Kane will step down from the board.
The group has called a general meeting for September 10, where it will ask shareholders to approve the proposals. Its largest shareholder with 22 percent, Cambrian Investment Holdings, has already declared its approval.
Following the subscriptions, Xtract plans to undertake a review of its assets, finalise the agreement with Global Oil Shale Group - to develop the Julia Creek oil shale tenements in Queensland, Australia, in return for a controlling stake in the project, as announced in June, - and to seek appropriate opportunities from which to develop the company.
“The directors of Tiger Resource have a track record of investing in junior natural resource sector companies both in the mining and mineral industries and in oil and gas exploration and production companies,” Xtract Energy said.
“Their direct experience in these sectors offers Xtract shareholders a new strategic investor who will proactively participate in the future of the company.”