Elephant Oil is to reciprocate Red Rock Resources’ (LON:RRR) recent investment.
The Benin oil explorer is taking £200,000 worth of shares in a £327,500 placing by Red Rock at 0.0475p. The funding will partly help pay for Red Rock’s stake in Elephant.
In June, Red Rock announced it had agreed an option to invest nearly £700,000 in the privately-owned Elephant, which has a production sharing contract for 4,500 sq km onshore Benin.
Of that, £275,000 will be paid now with a six month window to pay the remaining £412,000.
Elephant will own a 7.87% stake in Red Rock following today's placing. The remainder of the shares were placed with institutional and private investors.
Andrew Bell, Red Rock’s chairman said: "Following continuing discussions with Elephant, Red Rock has determined to press forward with its investment in Elephant's oil exploration activities in West Africa, and consequently to undertake the current funding exercise.
“We consider that the Elephant team is making rapid progress in working to expand its footprint and add further oil opportunities in West Africa. “
Matt Lofgran, chief executive of AIM quoted Nostra Terra (LON:NTOG), is managing director of Elephant Oil.