Africa Oil Corporation has raised US$50mn to fund the appraisal and development of the South Lokichar basin in northwest Kenya
The company closed a non-brokered private placement of shares to raise the money by releasing 31.1mn shares to the International Finance Corporation (IFC), the private lending arm of World Bank Group, following an equity subscription agreement.
“The IFC now holds approximately 6.83 per cent of the issued and outstanding common shares of the company,” said a statement from the company.
Africa Oil, along with Tullow Oil, is required to submit field development plans of pipelines and other facilities for South Lokichar for approval by the Kenyan government before the end 2015. The South Lokichar basin straddles blocks 10BB and 13T, where the two companies jointly discovered about 600mn barrels of crude oil.
“The Toronto Stock Exchange has conditionally approved the private placement and the new shares will be admitted to trading on the Nasdaq Stockholm,” said Africa Oil's chief executive Keith Hill.
In May this year, Stampede Natural Resources, owned by a fund which is advised by Helios Investment Partners, acquired a 12.4 per cent stake in Africa Oil by subscribing to 52.6mn shares on private placement for US$100mn. Many oil companies are looking for new partners to avoid cancellation of their production sharing contracts, as the fall in oil prices has made it difficult to get funding for exploration.