Sound Oil (LON:SOU) shares advanced over 10% today as it revealed that fund manager Henderson Global Investors has acquired shares in the company.
The institutional investor agreed to buy the shares in a ‘block’ trade with Manxdale Holdings, a group with which Sound Oil agreed to place £5.63mln worth of shares in July.
The Manxdale deal was a staged funding, with new shares being taken up each month. Sound Oil says that with this deal the funding is now closed.
"This placement of the remaining Manxdale shares removes the current overhang from our stock,” said chief executive James Parsons.
“I believe this is well timed as we approach the drilling of the Nervesa appraisal well.
“It is very encouraging that Henderson have taken a position in Sound Oil. We will continue to actively market the company to potential new shareholders and other institutional investors.
“Despite the company's already strong funding position, I am pleased to honour the open offer, which was announced last summer and is a long-standing commitment to our loyal shareholders."
Sound Oil will now proceed, as planned, with an open offer to existing shareholders, giving them the opportunity to buy new shares at 8.073p each. The total funding will be capped at £1mln.
Shares currently trade at around 10.5p, having risen sharply today.
The company says that following the completion of the final Manxdale placing its cash balance will stand at £8.5mln, with no debt.
Earlier this week, Sound Oil told investors that it expects to receive written approval by the end of the month to drill the potentially high impact Nervesa appraisal well.