Proactive Investors - Run By Investors For Investors

Columbus Energy raises funds to accelerate growth

The recent completion of the acquisition of Steeldrum Oil has been a material step in the growth of the company and establishes a very solid base for its Trinidad operations
Trinidad flag
The company now has a large, well balanced portfolio of assets across the south and south-west of Trinidad

Oil and gas producer Columbus Energy Resources PLC (LON:CERP) intends to raise around £2/5mln by placing shares at 3.5p a pop.

The Trinidad-focused company’s shares closed at 3.75p on Friday.

READ: Columbus Energy looks to production growth as it completes Steeldrum acquisition

The company announced the placing after being approached by two of its shareholders who expressed an interest in providing capital to accelerate Columbus’s growth strategy. A shareholder new to Columbus – Burggraben – intend to take some shares in the placing.

Funds from the placing will be used to repay the US$1.25mln loan facility with North Energy Capital it inherited when it acquired the Steeldrum Oil Company; the company had indicated last week it would repay the loan facility by drawing down from its facility with Lind Partners but has now opted not to do the repayment this way.

READ: Columbus Energy completes Steeldrum acquisition

“Our major shareholders were keen to stress that they would rather see the monthly repayments, that would have been required to have been made on that Lind loan if it had been drawn-down, being invested in more value-adding opportunities in our operations,” said Leo Koot, the executive chairman of Columbus.

Money left over will be used to establish and implement a multi-well drilling campaign on the Steeldrum assets and also in the South West Peninsula.

Columbus also intends to upgrade facilities in the South West Peninsula (SWP), particularly at Bonasse and Icacos, to speed up oil production growth and sales and also allow for early sales from any exploration success at the SWP in 2019.

"With the completion of the Steeldrum transaction, Columbus now has a diverse production base and multiple, large exploration prospects. This is despite the legacy issues we have faced over the last year, which have made a dent in our funds earmarked for further development and have slowed our pace of growth,” said Koot.

"We are grateful for the long-term support from our shareholders and are delighted to welcome Burggraben, who expressed a willingness, after their visit to our operations in Trinidad, to invest in Columbus when the right opportunity arose. We remain committed to the further creation of value for all invested in Columbus and are confident that today's placing provides us with the springboard to deliver additional production growth that will in turn be reflected in our cash flow and the share price which, in turn, rewards everyone, including myself and the management team, who are still effectively using half their salary to buy equity on a monthly basis at 5.1p per share," Koot said.

In total, the company intends to issue 71.4mln new shares, taking the total number of shares in issue to 830.9mln.

View full CERP profile View Profile

Columbus Energy Resources PLC Timeline

Related Articles

Texas flag
September 04 2018
Well workovers in June boosted average gross production before royalties to around 44 barrels of oil per day
1532936443_uranium.jpg
October 02 2018
The Salamanca project retains considerable support locally
oil and gas operations
November 12 2018
“The shares have been range bound recently, however, we believe that CERP now has a stronger platform for achieving its combined organic and acquisitive growth strategy"

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use