Petroneft reaps $43m from shares
Published 20/10/2010 | 05:00
SHARES in Petroneft, an Irish oil explorer operating in western Siberia, rose the most in more than 10 months in Dublin trading after saying it raised about $43m (€31m) in a share placing.
Petroneft advanced closed up 9.9pc to 55c -- the biggest rise since July 8.
The stock has gained 139pc this year, giving the company a market value of €192.4m and making it the best performing company on the Dublin stock exchange.
"Funds will be used to finance an accelerated exploration programme, business development and general corporate overhead," the company said yesterday .
Petroneft is "on course" to achieve a year-end production target of 4,000 barrels of oil per day by early December, rising to about 12,000 barrels of oil per day by the end of 2012, it added.
The share sale was substantially over subscribed and will be used to accelerate its exploration programme in two areas in Siberia the size of Kerry and Cork combined.
The company recently began producing oil in one of the two licence areas which it controls in Siberia and hopes to find oil in the other licence area soon.
"The company's model is relatively straightforward in that it is seeking to build a portfolio of oil reserves and resources in Western Siberia through the acquisition and subsequent development of small-to-medium-sized prospects using its access to western capital markets," Davy Stockbrokers analyst Job Langbroek wrote in a note to clients yesterday.
"The funding gives a high degree of flexibility to a management team that has heretofore used frugal financing to good effect.
"The model of building a full-cycle Russian oil and gas company is working well with numerous growth opportunities through the purchase of additional acreage/blocks and local knowledge."
Petroneft added yesterday that it remains on track both in terms of its production and exploration campaigns. The company will now place 63,125,000 new ordinary shares in two tranches.