Buccaneer Energy Completes £600,000 Fundraise for Fouke Area Development
Why we think this is neutral
The equity raise is reasonably priced at an 8.9% discount to the previous closing price, and the funds will be used to drill two new development wells in the Fouke area, which could generate further value for the company. However, the significant dilution to existing shareholders of around 35% and the short-term downward pressure on the share price due to the discount are negative factors.
Key Points
- Buccaneer Energy has raised £600,000 through a share placing
- The raise is priced at 0.015p per share, an 8.9% discount to the previous closing price of 0.01648p
- The funds will be used to drill two new development wells in the Fouke area, which could increase the company's production and cash flow
- The company is exploring options to monetize the associated gas production, including through a potential Bitcoin mining partnership
Summary
Buccaneer Energy has raised £600,000 (before expenses) through a subscription and placing of 4,000,000,000 new ordinary shares at a price of 0.015p per share. The proceeds will be used to fund the company's share of the drilling of two development locations in the Fouke area, where the company holds a 32.5% working interest. The Fouke area has previously produced water-free oil at high rates, and the new wells are expected to deliver similar production. The company is also evaluating options to monetize the associated gas production, including through a potential partnership with a Bitcoin mining operator.