OIL AND GAS explorer Pilot Energy plans to raise $3,600,020 after recently entering into a Share Subscription Agreement (SSA) with a group of investors.
Outlined in the agreement is an initial investment by the subscribers of $800,000 to acquire 400 million ordinary shares at 0.2 cents per share (Tranche 1), representing a 34 per cent premium to the company’s 30 day volume weighted average price (VWAP) of 0.149 cents per share.
Subject to shareholder approval, a further investment by the subscribers of $2,800,020 to acquire 933,340,000 ordinary shares at 0.3 cents per share (Tranche 2), representing a 100% premium to the company’s 30 day VWAP, Pilot said.
Upon completion of the Tranche 1 and Tranche 2 placements, the subscribers will collectively hold 45.4% of the issued capital of the company.
The funding provided by this transaction enables the company to meet its firm commitments on existing projects, and provides substantial working capital, Pilot said.
The news came as Pilot secured a 13 per cent stake in the Key Petroleum-operated EP 437 permit, onshore Western Australia, which it acquired from Caracal Exploration.
EP 437 is situated to the west of the northern onshore Perth basin between Geraldton and Dongara – with the company saying the low cost of exploration drilling and of development made the project more attractive, despite its relatively modest prospective resources.
Pilot will continue to focus on Australia for future growth opportunities, but remains opportunistic and will consider international projects that represent compelling investments.
As a result of ongoing challenging market conditions, Pilot has attempted to maintain a low cost base by limiting full time personnel to its managing director.
Pilot said it has benefited from the time, skills and experience of its other directors on a consulting basis as required and will continue to keep corporate costs to a minimum.
A number of board and management changes have been made in order to position the company to pursue future growth opportunities.
Management and finance specialist Benson Wong will be appointed executive director and chief financial officer upon completion of Tranche 1.
Upon completion of Tranche 2, entrepreneur Wilson Xue will be appointed non-executive director and petroleum engineer Xingjin Wang will be engaged as advisor to the board.
In addition, upon completion of Tranche 2, Conrad Todd and Rory McGoldrick have agreed to step down as directors, but will remain as advisors to the board.
Pilot Energy chairman Gavin Harper was pleased to welcome the subscriber group.
“Without doubt this transaction is transformative for Pilot Energy, particularly given the current industry downturn under which many of our peer companies are struggling to attract investor interest. We see this investment as a resounding endorsement of Pilot Energy’s assets, strategy and management team.”
“This new investment will significantly benefit the company and its shareholders over the coming years, and I firmly believe Pilot Energy will be exceedingly well placed for an industry recovery,” he said.
The subscribers are comprised of four Australian and Hong Kong-based private companies, with a joint purpose of investing in the Australian oil and gas sector, Pilot said.
Billion Power Capital Investment Limited (Hong Kong), Sunpex International Limited (Hong Kong), GS Energy, and Austar Nominees make up the subscriber group.
Formerly known as Rampart Energy, Pilot Energy is implementing a low cost, counter cyclical strategy to develop a portfolio of high quality oil and gas exploration assets.