SpotOn Energy - a Norwegian group which “takes a progressive approach to cost-effective offshore oil and gas field development” - has signed a term-sheet giving it exclusivity until the end of October 2020 to develop new appraisal plans at Barryroe, and agree binding commercial terms for the envisaged farm-out deal.
The Irish oil firm is raising £2.15mln via a share placing to institutional and other investors and SpotOn Energy will subscribe for £300,000 of additional shares, providing funds to meet licence costs for 2020 and working capital out to April 2021.
The new shares will be priced at 1.5p each, a discount of around 13%,
SpotOn will invest another £200,000 within six weeks, with a further subscription at the prevailing share price.
Additionally, two series of share warrants will be issued to SponOn and the participants in the placing – one with a 3p per share exercise price. and the other exercisable at 9p per share.
The equity raise is conditional on shareholder votes at a proposed general meeting, and, the company noted that its ability to continue as a going concern will be “materially compromised” if the funding does not go ahead.
“Shareholders should note that, if the fundraising is not successful, the company’s ability to continue as a going concern beyond mid-May 2020 will be materially compromised and the outcome of the Barryroe farm-out process will be negatively impacted,” Providence said in a statement.
It is anticipated that the general meeting will take place on May 5, allowing an effective admission data for the new shares of May 6.