Fastnet share deal raises £10m funding for Moroccan project
FASTNET Oil & Gas has raised £10m for Moroccan drilling projects through a new share placement.
The company raised the funds by placing 71.4m new ordinary shares with new and existing investors, at 14p per share. It said the sale was oversubscribed.
The money, combined with cash reserves of just under £7m, will initially be used to finance Fastnet's chunk of the bill for an exploratory well in the Foum Assaka license area off the coast of Morocco. The company has an 18.7pc stake in that license.
Fastnet is currently looking for partners to share some of the costs, but a farm-out deal could take until March to finalise. Thus it was necessary, a spokesperson said, to raise £10m independently to cover costs in the interim.
Once a farm-out agreement is reached, the £10m will be recouped. It will then be ploughed into drilling an appraisal well at another Moroccan license which Fastnet also has a stake in, the Tendrara-Lakbir licence.
Offshore Morocco is an emerging hydrocarbon basin that has attracted high calibre new entrants in the past 12 months including BP, Chevron, Cairn Energy, Galp, Genel and Total. As many as 12 wells are planned by the industry over the next two years.
"Fastnet has established a portfolio of over 25,000 square kilometres under licence in two emerging industry 'hot spots' in both offshore and onshore Morocco and offshore Ireland and I welcome the support from new and existing shareholders as we progress towards exploration drilling in Morocco in early 2014," said managing director Paul Griffiths.
Shares traded at £14.38 in London yesterday, a decline of 2.5pc on the previous day.