Shares of Baron Oil PLC (LON: BOIL) fell 37.5% after the company announced that it had raised £3 million by selling 6 billion new shares at 0.05p each.
The oil and gas exploration company also revealed that it had entered into a conditional agreement to increase its shareholding in SundaGas Limited from 33.33% to 85%.
The company’s higher shareholding will increase its indirect interest in the TL-SO-19-16 PSC (Chuditch PSC) located offshore the Democratic Republic of Timor-Leste from 25% to 63.75%.
Baron Oil has an ‘Earn In’ arrangement that will see its share of the resources located at Chuditch rise 255% to 2,248 BCF, equivalent to approximately 375 MMBOE.
Baron also agreed to fund the remainder of the estimated US$3.5 million Chuditch work programme to November 2022, including the licensing and processing of 3D seismic data.
Members of the company’s board of directors are also participating in the fundraising activities in a show of confidence in the Timor-Leste gas exploitation project. Activities around the project have picked up locally and regionally, with plans to extend the existing infrastructure being underway.
Baron’s CEO, Andy Yeo, commented: “There has been a marked increase in Timor-Leste gas exploitation activity recently, and we are delighted to have had both the opportunity to increase our indirect interest in the Chuditch asset as well as the support of new and existing investors to fund this exciting project. We look forward to updating shareholders on progress.”
Baron Oil share price.
Baron Oil shares fell 37.5% to trade at 0.05p, dropping from Tuesday’s closing price of 0.08p.