Africa Oil plans US$450 million share issue

oil ora 1Proceeds from the sale of Africa Oil's share issue will be used to fund the company’s future exploration and development programme in East Africa. (Image source: Lindsey Gira/Flickr)Oil and gas explorer Africa Oil will issue 56.5mn common shares at US$7.99 per share through a private placement that should generate around US$450mn

The offering will close at the end of October 2013. The company’s shares are listed on the Vancouver Stock Exchange and the Nasdaq First North stock exchange in Stockholm, Sweden.

Proceeds from the sale will be used to fund the company’s future exploration and development programme in East Africa, as well as for corporate and general expenses, Africa Oil said in a statement.

Earlier this year, Africa Oil announced that it had discovered oil in the Ekales prospect located at the Lokichar basin, onshore Kenya.

Africa Oil holds a 50 per cent working interest in this block, with the remaining stake held by Tullow Oil Kenya.

The company said that two additional lightweight rigs for testing and shallow drilling operations were being mobilised into northern Kenya and are expected to be operational in Q4 2013. Africa Oil also has assets in Ethiopia and Puntland in Somalia.

The joint bookrunners for this share issue of Africa Oil are Citigroup Global Markets Limited, Dundee Securities Europe and Pareto Securities.

“Africa Oil Corporation has received substantial support for the offering from both existing shareholders and new institutional investors,” the company said in a statement.

 

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