Anglo African raises £6m to complete well TLP-103C

Anglo African Oil & Gas has raised gross proceeds of £6m through a placing of 60 million new ordinary shares at a price of 10p each, it announced on Wednesday.

The AIM-traded firm said the placing would provide it with the funds required to complete the drilling of well TLP-103C at its Tilapia field in the Republic of the Congo, and to conduct due diligence over potential acquisition opportunities.

It said the placing used the company's existing authorities to issue the new ordinary shares.

Anglo African would use £4.25m of the placing’s net proceeds to complete well TLP-103C, including contingency, and £0.9m for outstanding and anticipated operational costs.

It said it would also spend £0.35m on due diligence over potential acquisition opportunities, for a total spend of £5.5m.

“The money raised in this placing enables us to complete the TLP-103C well, the results from which so far have hopefully repaid shareholders' confidence in the company,” said chairman David Sefton.

“We are therefore very grateful for the continued support of our long-term shareholders who have made this placing possible.

“We are particularly grateful that they have moved so quickly to finance the company against the backdrop of such market turbulence.”

Sefton said the board remained “extremely excited” about the potential for TLP-103C, explaining that the confirmation of oil in multiple reservoirs, and with greater aggregate oil columns than expected, should - with positive results from further testing - enable the firm to “quickly” effect a material increase in production and cash flows.

“However, we are currently drilling towards the Djeno and a success there could prove even more significant than the excellent results achieved so far in the R2 and the Mengo.

“We hope to be in a position to announce initial results on the Djeno before the end of this month.”

The placing replaced the capital that was available under the Sandabel Capital facility, Sefton confirmed, that had now been cancelled.

“There are no outstanding loan notes due to Sandabel, or any other lender, and the loan notes that were issued to Sandabel were all converted into ordinary shares last year.

“This placing therefore marks a line in the sand for the funding of the TLP-103C well and we look forward to providing further updates on its progress in due course.”