Oil firm TXO has agreed to take an initial 25 per cent equity interest in a new joint venture company, called Tasmania Oil and Gas, in partnership with Empire Energy, Alpha Prospects and Hill Street Investments.
TXO paid $0.1m cash for the consideration in addition to agreeing to the novation and capitalisation of its existing convertible bond in Empire Energy in favour of Tasmania Oil and Gas.
The joint venture has formed as a new independent exploration and production company to take on and continue with the Tasmania onshore exploration activities carried out to date by Empire and Great South Land Minerals under the oil and gas exploration licence EL14/2009.
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The company also completed a further investment in Grand Bahama Group (GBG) in which it will purchase further shares for £0.35m, equal to a further shareholding of 6.54%, taking its stake to 23.64%.
The company has also renegotiated the terms of an option to invest a further £2.615m in GBG in return for additional ordinary shares in the firm. The option expires December 31st 2012 and if exercised would increase TXO's total holding in GBG to 43.18%.
For the period from January 1st to September 12th 2012 GBG recorded a loss of $433,850 on turnover of $291,643 and had net assets of $337,662 at the period end.
TXO also said that it has received full repayment of the recent unsecured £49,000 and £10,000 loans it made to GBG.
In another announcement, the firm said that it has issued new convertible loan notes totalling £540,517, resulting in total gross proceeds of £278,850.
The majority of the existing loan note holders have agreed to increase their investments by 50% by subscribing for the new loan notes. TXO has amended the terms of the existing loan notes for these holders by reducing the conversion rate from 0.75p per ordinary share to 0.23p, and extending the term to December 31st 2013.
The board also approved the issue of £261,667 of new loan notes to a high net worth investor and some creditors and directors to settle outstanding fees. £250,000 of these new funds are specifically dedicated to the increased investment in the Grand Bahama Group, detailed above.
The share price rose 5.36% to 0.29p by 10:22.
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