Shares of Leni Gas & Oil (LSE: LGO) fell 2% in early trade after the oil and gas explorer arranged a placing of 200m new ordinary shares at 3.5p per share. The placing, which has raised £7m before expenses, will provide the company with capital for its expansion plans in Trinidad, and speed up the completion of the $5m Trinity-Inniss deal announced yesterday.
The funding also provides LGO with the requisite cash to deploy work-over rigs to Trinity-Inniss without impacting the 30 well development plan at the group’s Goudron oil field, located 20km away. Trinity-Inniss has 25 active wells producing as much as 150 barrels of oil per day (bopd).
The latest update from Goudron Sands shows “extensive” oil reported from mud logging. Well number four, GY-667, is drilling ahead of depth at 1,530 feet.
Neil Ritson, the chief executive of LGO, commented:
“Access to this capital will enable LGO to accelerate the closing the new producing Trinity-Inniss Oil Field transaction announced yesterday. Drilling work at Goudron is continuing to plan and we anticipate being able to move a work-over rig to the Trinity-Inniss Field immediately after closing the acquisition.”
After the issuance of the new shares Leni Gas & Oil will have 2,688,195,353 shares in issue. The share price has surged in 2014, rising four fold after sustained drilling success.
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Mark Stones has no position in any shares mentioned. The Motley Fool has no position in any of the shares mentioned.