Shares in Fastnet Oil & Gas (LON:FAST) were up 7% this morning after the company’s £15 mln fundraiser announced yesterday afternoon.
At 11.30 am, the shares were changing hands at 24.62 pence for a rise of 1.62 pence, valuing the explorer at just shy of £50mln.
The stock hit a 52-week peak of 31.125p in mid-November, more than doubling from its price at the start of October.
Traders were broadly supportive today of the decision to restock the coffers, which allows the group to press on with its plans without worrying unduly about the finances.
Fastnet raised its cash via a placing at 22 pence. It will be used to accelerate drilling off the coast of Morocco as well as funding other work in Ireland’s Celtic Sea.
While there will undoubtedly be some disappointment among existing investors that they were unable participate at the lower price, the influx of new, high quality investors is to be welcomed.
It is understood a significant proportion of the over-subscribed share issue was taken up by institutions new to the Fastnet story.
"[The placing] is a testament to the portfolio of assets, management team and progress since our admission to AIM and ESM that Fastnet has been able to secure the support of significant new investors and continuing support from existing shareholders,” said chairman Cathal Friel.
Broker Shore Capital, which helped arrange the placing alongside Mirabaud Securities, puts Fastnet’s net asset value at 34 pence a share.
“The company’s projects remain in the pre-drill phase, although Fastnet has taken a systematic but low cost approach, which we believe could add significant value over time, in both Morocco and the Celtic Sea,” said Shore analyst Craig Howie.