Mercom joins AIM's clutch of oil explorers

Mercom Oil Sands, a company formed to acquire and develop oil sand properties in Canada, made its dbut on AIM on Tuesday, May 29th.

The company came to London's junior market after raising £3.35m through a placing of 33.5m new shares at 10p each with institutional and other investors.

Based on the placing price, Mercom has a market capitalisation of £31.7m.

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The net proceeds of the placing will be used to fund Mercom's proposed drilling programme and due diligence on other oil sands properties in the region which it is interested in acquiring.

Thus far, the group has a 50% ownership and working interest in four oil sand leases over the Chard field in Alberta, Canada. The interest cost C$700,000, and the company has agreed to fund a further C$2.5m of exploration and development expenditure on these leases.

The company plans to drill eight wells over the next two years in order to form a better understanding of the contingent resources. The company's strategy in the longer term is to take the Chard Oil Sand Leases into production.

Libertas is the nominated adviser (nomad) and broker to the company.

JH