The proceeds are earmarked for a new growth campaign which will include a new well, an upgrade to gas processing facilities, and expanded pipeline infrastructure in and around the city of Douala in Cameroon. Victoria Oil & Gas plc (VOG) has conditionally raised gross proceeds of US$23.5mln through an offering of 30,893,660 placing shares and 294,096 subscription shares at a price of 57p each.
The new shares being issued will represent approximately 22% of the company's enlarged issued ordinary share capital, before any new ordinary shares issued under the related Open Offer to existing shareholders which is aiming to raise US3mln. In late afternoon trading VOG shares were trading at 59p, down 8.9%, or 5.75p.
READ: VOG results show 11% rise in gas production, attentions on new Logbaba successes
The company highlighted that Wednesday’s announcement comes amid ‘very recent market speculation’ that it was looking to raise funds, and it confirmed that it had been in advanced talks with a number of potential investors.
Proceeds along with additional capital from local banks in Cameroon will be put to a new growth programme aimed at the estimated 1,700 megawatt power deficit in the City of Douala.
The company, which has had success with gas-to-power initiatives, aims to deliver gas output of 100mln cubic feet of gas per day by the end of 2021.
READ: Victoria Oil & Gas extends deadline for proposed Bowleven tie-up
In the near term, it plans to drill an additional well (La-109) at the Logbaba project and it wants to upgrade processing facilities up to 70mln cubic feet per day. Additionally, it intends to expedite the development of the Matanda and Bomono projects. Infrastructure investments are also planned. It plans to extend gas pipeline reach around the Douala to Bomono, the Eastern Corridor and to other specific customers. The funding is being arranged by Shore Capital and FirstEnergy Capital.
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