Bahamas Petroleum Company (AIM: BPC) saw that 475 million new common stocks diluted their prices, resulting in losing the profits the stocks earned.
The company said the share placement has been successful and £9.5 million has been raised through shares issued at a price of 2.00p.
Bahamas Petroleum said revenue from placement will help to increase financial capacity and fully cover the cost of patience #1. This, as previously reported, has been set by Spud by the end of the year, with a resource target of 0.77 billion barrels of oil.
The company added that it is a reasonable recent placement, a continuous effort to optimize its funding strategy, driving forces to reduce capital costs, and less cohesive dilution and greater certainty.
Based on placement revenue, existing cash balance and conditional convertible notes, the company said it does not expect it to need to draw further into the previously announced £16 million zero coupon, a second ranking convertible bond facility.
Investor’s Notes
Simon Potter, CEO of the group, commented:
“Today’s placement is another milestone in the implementation of its fundraising strategy. Placement revenue is certain, readily available and throws us into a much stronger overall financial position, simplifying the capital structure of our business with known dilutions compared to other existing fundraising options. With the success of the placement, we can effectively reduce the need to rely on other previously announced fundraising equipment.
“At the same time, we are continuing to look at other wide range of other financing options as we continue to seek to strategically strengthen the company’s overall financial and operational capabilities, many of which have been newly available to us due to the expansion of our asset base in recent months.”
Investor’s Notes
Following the placement, Bahamas oil stocks fell at 20.98% or 0.59p, reaching 2.21p at 12:00 GMT on 01/10/20 12:00 GMT, respectively. This rose from its annual lowest point of 1.20p in March, but well below its recent peak in June of 3.53p.
The company currently has an AP/E ratio of -9.33 and is given a 55.65% “underperformance” rating by the MarketBeat community.
