The Pennpetro Energy PLC (LON: PPP) share price dropped 36.2% after making four significant announcements. First, the company revealed that it had raised £1,545,759 via a share placement and subscription. The firm issued ten million new ordinary shares in addition to 51,525,325 existing ordinary shares of £0.01 each.
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The new shares were priced at 3p each, representing a 40% discount to the company’s closing share price of 5p on Monday. The discount could explain the decline in Pennpetro Energy’s share price. The firm intends to use the proceeds of the capital raise to drill the first production well in Gonzales County, Texas.
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Pennpetro Energy also announced that it had signed a farm-in agreement with UKOG (137/246) Ltd and Horse Hill Developments Ltd, subsidiaries of UK Oil & Gas plc (UKOG), to drill the next infill oil production well at the Horse Hill Oil Field located approximately 2km north of Gatwick airport.
The binding term sheet covers drilling a new crestal infill well called Horse Hill-3 (HH-3), to be spudded after completing a Pennpetro-funded high-definition 3D seismic survey. Once the HH-3 well is completed, Pennpedro will have a 49% share in the production from Horse Hill-3 and future wells, plus a 49% interest in the Licences.
Pennpedro will use the proceeds of today’s capital raise to fund the 3D seismic survey and the rest of the farm-out agreement. The company must still get all the necessary approvals from its shareholders for the program to proceed.
The energy company also revealed that a drill rig had arrived on site and started drilling operations at its Whistling Straits #1H well after signing a Joint Operating Agreement with Millennium PetroCapital Corporation.
The ongoing drilling activity targets the Austin Chalk and is expected to last for two weeks. The well will have a true vertical depth of 7,545 feet and a measured depth of 12,760 feet, with a 4,800 feet lateral.
Pennpetro Energy also appointed Mr David Lenigas to its board. Mr Lenigas is a mining engineer with extensive senior corporate experience across energy companies in the UK, Canada, Australia, and South Africa stock exchanges.
*This is not investment advice.
Pennpetro Energy (PPP) share price.
The Pennpetro Energy (PPP) share price dropped 36.2% to trade at 3.19p, from Monday’s closing price of 5.00p.
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