The Tower Resources PLC (LON: TRP) share price plunged 27.8% after the oil and gas company raised £1.5 million via a discounted share placement.
Investors reacted negatively to the capital raise after issuing 576.9 million shares priced at 0.26p each, representing a 29% discount to Thursday’s closing price.
Jeremy Asher, Tower Resources Chairman and CEO, also subscribed for 9.6 million new shares during the placement, paying £25,000 for the extra shares.
The oil and gas company told investors that it would use the proceeds of the share placement to fund the maintenance and other expenditures for its Cameroonian operations as it commences drilling and testing operations at its NJOM-3 well.
Tower Resources will also use the monies raised for its Namibian operations. In addition, it plans to conduct a basin modelling study on the PEL96 license area based on data collected from the drilling operations conducted in adjoining areas.
The firm will also use the funds raised for its South African operations, preparing to acquire seismic data later this year and into 2023.
Investors did not appreciate the discounted rate at which the company raised funds, as reflected in today’s decline in Tower Resources share price.
Jeremy Asher, the Chairman and CEO, commented:
“We are working to finalise the Cameroon farm-out, which both parties wish to see completed, and we are also encouraged by recent news reports of drilling operations underway at Graff-1 and Venus-1X, operated by Shell and TotalEnergies, respectively. However, while waiting for the farm out to complete, we must continue to prepare for drilling operations and to maintain the current equipment inventory in a drill-ready state.”
“We also want to keep moving forward in Namibia and South Africa so that we can capitalise on both the improving economics of our acreage positions and also further positive news around us. This does require us to raise capital at this time, though we continue to seek to keep share issues to a minimum.”
Long term investors interested in acquiring Tower Resources shares may find its current prices pretty attractive given today’s decline.
*This is not investment advice. Always do your due diligence before making investment decisions.
Tower Resources share price.
Tower Resources share price plunged 27.78% to trade at 0.26p, falling from Thursday’s closing price of 0.36p.
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