- Whitebark Energy (WBE) is looking to raise $3 million and will use the money for land acquisitions and improvements to its Wizard Lake Oil Project
- The money will be raised through a one-for-three non-renounceable entitlement offer, with shares priced at 0.3 cents each
- Chairman Charles Morgan has also announced his intention to subscribe for $250,000 worth of shares
- Whitebark has dropped 11.1 per cent on the market today and shares are trading for 0.4 cents each
Whitebark Energy (WBE) is looking to raise $3 million and will use the money for land acquisitions and improvements to its Wizard Lake Oil Project.
Due to COVID-19 and decreased oil prices, the energy sector has experienced many disruptions.
These disruptions have impacted Whitebark's cash flow and the production at Wizard Lake.
However, it has also presented attractive acquisition opportunities, and allowed Whitebark to proceed with the maintenance of its existing wells.
The money will be raised through a one-for-three non-renounceable entitlement offer with shares priced at 0.3 cents each.
This price is a 35 per cent discount to the 15-day volume-weighted average price.
The entitlement offer will include a shortfall facility, which means eligible shareholders who take up their full entitlement will be able to apply for additional shares from those that aren't taken up.
However, there is no guarantee at this point that this will happen.
The entitlement offer is expected to close on July 15.
"The board has carefully considered the current energy market circumstances and has decided to proceed now to strengthen the company's operational and financial capacity to emerge from the energy sector and COVID-19 crisis in a better position," Chairman Charles Morgan said.
"The Directors of Whitebark believe this issue will better position the company to recommence its growth momentum. I intend to participate and contribute approximately $250,000 to the offer," he added.
Whitebark has dropped 11.1 per cent on the market and shares are trading for 0.4 cents each at 1:17 pm AEST.