Reconnaissance Energy Africa Ltd (TSX-V:RECO, OTCQX:RECAF, FRA:0XD) said it will use the net proceeds from an upsized C$19 mllion bought-deal financing to fund an open-hole horizontal sidetrack and production testing program targeting the Huttenberg and Elandshoek formations, along with general corporate purposes and working capital.
The company has entered into an amended agreement with Research Capital Corporation as sole bookrunner and lead underwriter, on behalf of a syndicate including Canaccord Genuity (TSX:CF, LSE:CF) Corp. and ATB Cormark Capital Markets, to increase the size of its previously announced offering.
The underwriters agreed to purchase 26 million units on a bought-deal basis at C$0.73 per unit.
Each unit consists of one common share and one-half of one common share purchase warrant. Each whole warrant entitles the holder to purchase one additional common share at C$0.93, exercisable for up to 36 months from closing.
ReconAfrica said it will use commercially reasonable efforts to list the warrants for trading.
The underwriters have also been granted an over-allotment option to increase the offering by up to 15% of the total units, exercisable for up to 30 days following closing.