The Challenger Energy Group PLC (LON: CEG) share price fell 17.64% after announcing that it had secured a £3.3 million convertible loan note funding facility with a UK-based alternative asset management and investment firm.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.
The facility will support the company’s business development, particularly accelerating the technical work programs in Uruguay for both the AREA OFF-1 block and the newly awarded AREA OFF-3 block.
Top Broker Recommendation
- eToro Top stock trading platform with 0% commission – Read our Review
- Admiral Markets More than 4500 stocks & over 200 ETFs available to invest in – Read our Review
- BlackBull 26,000+ Shares, Options, ETFs, Bonds, and other underlying assets – Read our Review
- IG Top-tier regulation – Read our Review
- XTB UK regulated by the FCA – Read our Review
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY
The energy company has already drawn down £0.55 million of the funds, with future drawdown of the remainder at the Company's discretion. The company also secured a 3-month extension to complete the sale of Cory Moruga assets in Trinidad and Tobago, currently awaiting regulatory approval.
Challenger Energy also took another step to relinquish its Weg Naar Zee PSC in Suriname, consistent with its strategic focus on core assets. The company also announced that its CEO, Etyan Uliel, was planning to acquire an additional 60 million shares in the firm to increase his shareholding to 6%.
The company also noted that it had issued about 315 million new shares to various service providers instead of paying them in cash. Investors reacted negatively to the news, given the significant dilution of existing shareholders by issuing new shares.
Challenger Energy intends to use the funding facility to provide it with the flexibility needed to fund the further development of the technical case underpinning the AREA OFF-1 farm-out, with the formal farm-out process proceeding well.
The company aims to secure a partner for AREA OFF-1 by the end of 2023 to facilitate the 3D seismic process in 2024.
Eytan Uliel, Challenger Energy’s CEO, said: “In the last year, across the broader Challenger Energy business, we have completed value-enhancing technical work, improved production operations, high-graded our portfolio, secured new assets, and ensured a range of options are available to deliver additional funds into the business. Progress has been substantial, but the timing of when we need to spend and when we will see cash inflows is not always within management's control. We have, therefore, now taken steps to ensure that we have flexible additional funding available if and when needed…”
Challenger Energy (CEG) share price.
The Challenger Energy (CEG) share price plunged 17.65% to trade at 0.070p, from Tuesday’s closing price of 0.085p.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.