MXO plc, an oil and gas investing company quoted on AIM, announces that it has raised £1,000,000 before expenses via a placing and subscription (the “Fundraise”) and provides the corporate update.
· £1,000,000 raised, before expenses, through a subscription and placing of ordinary shares to provide on-going working capital
· Continued production from the Aje field of around 3,300 bopd (165bopd net to MXO)
· Discussions underway with potential project financing partners in connection with MXO’s 6.67% of the Aje Phase 2 development, targeting estimated gross production of 8-12,000 bopd
· Appointment of Gneiss Energy, a boutique energy corporate advisory firm, to assist with project financing discussions
· The Company has undertaken its own engineering cost estimates which indicate that the future gas development could be substantially lower than the originally estimated figure of US$1.1 billion. At a development cost of US$ 545 million, the NPV10 could be US$ 50 million, net to the Company – a 78% increase in the Company’s base NPV assumption
· Reduction in Company’s operating cost base including the receipt of shares in lieu of salary for 6 months by certain Company Directors to preserve cash
· Non-Executive Chairman Nicolas Lee has stepped down with immediate effect
· Richard Carter, currently a Non-Executive Director, will assume an interim role as Non-Executive Chairman as the Board undertakes a restructuring designed to prepare the Company for future activity
MXO has raised £1,000,000, before expenses, via a placing and subscription of 1,000,000,000 new ordinary shares at a price of 0.1 pence per share (“Placing Price”) (the “New Ordinary Shares”). As part of the Fundraising, certain Directors will participate, by way of both subscription and conversion of accrued salaries, for £153,000 of New Ordinary Shares at the Placing Price.
In August 2018, the Company announced that consent from the Minister of Petroleum Resources had been received for the renewal of the OML 113 licence for another term of 20 years. The renewal is subject to the satisfaction of certain conditions, including a commitment to develop the gas potential of the licence.
The proceeds of the Fundraise will be used for the additional investment appraisal of OML113 and to pay its working interest share of the licence extension fees associated with the renewal of the OML 113 licence.
Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings in the Placing Shares on AIM will commence on or around 28 October 2018.
Board participation and remuneration
As part of the Fundraising, Directors will participate, by way of subscriptions and conversion of accrued salaries, for £153,000 of New Ordinary Shares at the Placing Price.
Certain directors of the Company have participated in the Fundraise as follows:
Furthermore, the Company has carried out a review of its cost base and has taken measures to significantly reduce this going forward. To this end, in addition to the participations above, Directors have also agreed to receive shares in the Company in lieu of salary for six months following the Fundraise. It is intended that these shares will be issued at the higher of, the price based on the 5-day VWAP preceding the date of issue of these shares or the Placing Price.
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