African energy firm Ophir Energy got away a share placing at a premium to its prevailing share price as it raised funds to part-finance an expanded drilling programme in 2013/14.
The £1.86bn-valued company placed 30.5m shares at 495p each, raising £151m. At the close of business on the day before the placing was announced Ophir's shares were trading at 488.1p, which is below the price at which the shares were placed.
The newly issued shares represent around 8.3% of Ophir's issued share capital prior to the placing.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The result of the placing is a strong endorsement for Ophir's plans to beef up its exploration programme in Tanzania and Kenya, and possibly also Gabon and Equatorial Guinea.
Funds from the issue will also enable the company to maintain its 40% equity position - at least for the time being - in three blocks oeprated by oil and gas titan BG off the coast of Tanzania.
At the same time Ophir plans to introduce industry partners into the East African positions where it is in the operator during the second half of 2012, and is preparing for an East African programme in the first quarter of 2013 on its operated acreage in Block 7 and East Pande in Tanazania and L-09 in Kenya.
On Monday the firm said it had made a 4.5tr cubic feet gas discovery at its Jodari-1 well in the area, exceeding pre-drill estimates by 55%.
"In West Africa, by the end of the year we will see the results of extensive 3D seismic pre-salt exploration programme in Gabon and of a three-well programme in Equatorial Guinea," predicted Nick Cooper, Chief Executive Officer of Ophir.
The company said it is on course to drill nine wells in 2012, for which it was already fully funded, and up to thirteen in 2013, across Tanzania, Kenya, Gabon, Equatorial Guinea and Madagascar.
The share price of Ohir quickly rose above the placing price on the announcement of the share issue, rising to 515p at one point before ebbing.
jh
