Oil and Gas Eye Q3 2012

Amid volatile equity markets, secondary fund-raising by oil and gas companies deteriorated markedly in Q3.

For the first time in six years, total funds raised from new issues outstripped that from further issues. Q3’s secondary fund-raising by AIM listed oil and gas companies totalled £48.9m – 58% lower than Q2’s total, and 71% lower than Q3 2011’s. Secondary fund-raising across the wider AIM market also proved challenging, with the £305.7m raised in Q3 40% lower than Q2’s total.

The few AIM-listed oil and gas companies successful in raising funds included:

• Xcite Energy secured £8.3m through the second stage of a private placing with Global Resource Funding Partners LLC in July. In the final stage of the placing in August, Xcite also raised £8.3m.
• Tower Resources successfully raised £5.9m before expenses via a July placing. It will use the proceeds to fund the US$5.3m cost of converting its 15% carried interest in Namibian offshore license 0010 to a 30% working interest and cover pre-drill costs of its working interest in the license.
• President Petroleum raised £5.8m via a placing in September. It will mainly use proceeds to buy interests in two concessions in Paraguay and the initial work for these, with the rest used for incremental exploration and development work on its Argentine assets.
• Tangiers Petroleum raised £2.3m through a series of private placements. It will use the proceeds to assess growth opportunities in Africa, including potential farm-in deals and acquisitions.
• In August, Solo Oil raised £1.5m through a placing. It will use funds to complete the payment schedule due under the Ruvuma Petroleum Sharing Agreement (PSA) and prepare for the next phase of work in the Ruvuma Basin onshore Tanzania.

Oil and gas funds raised on AIM and the Main Market (£ million)

Note: New issues include placings, introductions, transfers and readmissions (money-raising and non-money raising)
Source: London Stock Exchange.

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