AFRICA-focused and Australia-listed oil and gas explorer FAR has completed a placement to institutional and sophisticated investors aiming to raise $46.7 million before expenses so it can continue to fund its share of a drilling program off Senegal.

The capital raising, whereby 424.96 million shares were issued at a price of 11 cents per share, follows the discovery of oil in FAN-1 with its partners Cairn Energy, ConocoPhillips and Petrosen.

The price per new share of 11c under the placement represented an 18.5 per cent discount to the company’s latest market price on the Australian Securities Exchange and a 10.3% discount to the 10 day volume weighted average price on the ASX.

FAR managing director Cath Norman said the company had secured strong support for the raising.

“Given the state of the market we are very pleased to have been oversubscribed with particularly strong support from Australian institutions and our existing shareholders,” she said.

“The discovery of oil in FAN-1 and an extended period of unscheduled maintenance have resulted in an increase to the forecast cost of the Senegal drilling program that exceeds our funding cap for both wells.”

“The additional funds raised will now allow us to complete this very exciting drilling program,” she said.

FAR now has a cash position of $40.7 million, bolstered by the capital raising.

The company will now pay about US$36 million to complete the drilling of both wells – dipping into its cash reserves to do so, FAR said in its Quarterly Activities Report.