JUNIOR oil and gas explorer Magnum Gas & Power Limited has announced a capital raising comprising a fully underwritten rights issue to raise around $1.765 million.

The WA-headquarted company has mandated DJ Carmichael Pty Limited to fully underwrite the renounceable rights issue to existing Magnum shareholders. The issue will be a renounceable two-for-one offer to eligible shareholders with one free attaching option for every two new shares subscribed exercisable at $0.003and expiring four years from issue date, to raise $1,764,751 via the issue of 1,765 million shares at $0.001 per share.

Magnum said that as part of the financing existing key creditors and convertible note holders will be paid in full or converted into shares at the equivalent price of $0.002 leaving the company in a strong financial position.

“Following the repayment of creditors, the funds raised by the Offer will cover the working capital needs of the Company and provide capital to identify new opportunities in the energy sector,” the company told the ASX.