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- Byron Energy (BYE) has received commitments for a $16 million placement to fund work at its SM58 exploration play
- More than 123 million shares will be issued at a price of 13 cents each
- Byron will also undertake a share purchase plan to raise an additional $4 million
- Under the placement, eligible shareholders will have the opportunity to purchase up to $30,000 worth of shares
- Finally, Byron has also announced that Crimson Midstream has agreed to subscribe for an extra $5.4 million
- The money from the placement, share purchase plan, and Crimson Midstream will be used to fund production at the company’s SM58 project, an oil and gas exploration block off the Gulf of Mexico
- Following the news Byron is up a slight 3.23 per cent and shares are currently trading for 16 cents each
Byron Energy (BYE) has received commitments for a $16 million placement to fund work at its SM58 exploration play.
Approximately 123,076,921 shares will be issued at a price of 13 cents each to raise the funds, and the placement will be completed in two phases.
Phase one will see the issue of 106,331,150 shares to raise approximately $13.8 million. This is expected to be completed on May 25.
Phase two will see the remaining 16,745,771 shares be issued to raise $2.2 million, however, this phase will only be made up of subscriptions from Byron Directors and associates.
This phase is subject to shareholder approval, which is expected to be received towards the end of June.
Byron will also undertake a share purchase plan to raise up to $4 million.
Eligible shareholders will be able to purchase up to $30,000 worth of shares, which are also priced at 13 cents.
The share purchase plan is expected to open on May 26 and close on June 12. Byron says more details regarding the plan will be announced soon.
Finally, Byron has also announced that Crimson Midstream has agreed to subscribe for an extra US$3.5 million (roughly A$5.4 million) in the form of promissory notes.
A promissory note is a signed document that promises to pay a stated sum of money to a party, either by a specific date or on-demand.
The money from the placement, share purchase plan, and Crimson Midstream will be used to fund production at the company’s SM58 project, an oil and gas exploration block off the Gulf of Mexico.
This capital will complete the SM58 G platform and pipeline installation, as well as fund the completion of the SM58 G1 discovery well.
“This additional capital will allow us to complete the development of our SM58 oil and gas project, including the completion of SM58 G1 discovery well, with production and cash flow expected to commence in September 2020,” CEO Maynard Smith commented.
“A$16 million in placement funds, US$3.5 million in additional loans from Crimson Midstream and the share purchase plan funds will put us in a stronger financial position and allows us to maintain momentum at SM58, notwithstanding the oil price shock and the COVID-19 restrictions,” he said.
“Successful development of SM58 will enable us to continue executing our focused growth strategy, designed to build a successful exploration and production company operating on the shelf in the Gulf of Mexico,” he added.
Byron is up a slight 3.23 per cent and shares are trading for 16 cents each at 12:27 pm AEST.
