Expion Energy (NASDAQ:XPON) said it closed the initial tranche of a private placement raising $9 million, with the potential for an additional $91 million from the same group of investors, as the company moves to fund its newly acquired oil and gas exploration assets in Eastern Louisiana.
Shares of the company, formerly known as Expion360, jumped 97% in afternoon trading.
The initial closing consisted of 8% convertible debentures alongside warrants to purchase roughly 2.1 million shares of common stock at an exercise price of $4.25. Net proceeds from the raise were about $8.2 million after fees.
The debentures are convertible into shares of Series A-1 8% convertible preferred stock, which would then convert into common stock at $4.25 per share, subject to shareholder approval. The lead investor in the placement is affiliated with the company's interim Chairman and former CEO.
Proceeds will go toward the acquisition of oil and gas assets in Eastern Louisiana and for working capital purposes, the company said.
The financing follows Expion's disclosure that it acquired an oil and gas exploration opportunity in Eastern Louisiana, its first move beyond its legacy battery and energy storage business. The company will pay an adjusted cash purchase price of about $3.425 million for the acquired interests and commit up to $4 million to fund leasing activity, with at least $2.5 million earmarked for leasing.
The acquisition includes an existing leasehold of approximately 3,000 net acres, a wellbore, intellectual property associated with the prospect, and mineral title research covering approximately 13,000 net acres. The prospect targets multiple stacked benches within a reservoir that the company said has numerous analog field discoveries across the regional trend.
Expion said it intends to increase its acreage through new leases and the re-leasing of expired tracts as it builds out exploration and development activities alongside its lithium iron phosphate battery operations.