AIM-listed Orcadian Energy has announced its intention to raise gross proceeds of approx. £0.5 million by means of a placing of new Ordinary Shares to certain institutional and other investors at a price of 10 pence per share.
The Placing Price represents a discount of approx. 33 per cent. to the Closing Price of 15 pence per Ordinary Share on 31 January 2023, being the latest practicable business day prior to the publication of this Announcement.
The Placing is to be conducted by way of an accelerated bookbuild process which will commence immediately following this Announcement and will be subject to the terms and conditions set out in Appendix II to this Announcement.
A further announcement confirming the closing of the Bookbuild and the number of Placing Shares to be issued pursuant to the Placing is expected to be made in due course.
Placing Summary
- Placing to raise approx. £0.5m (before expenses) through the issue of approx. 5,000,000 Placing Shares at the Placing Price.
- Placing to be conducted via an accelerated bookbuild process launching today.
- The Placing Shares, assuming full take-up of the Placing, will represent approx. 7 per cent. of the Enlarged Issued Share Capital.
- The net proceeds of the Placing will be applied to deliver the Company's work programme as further detailed below, and for working capital purposes.
The Placing
The Company intends to issue approx. 5,000,000 Placing Shares, to raise gross proceeds of approximately £0.5m, to participants in the Placing. The Placing Shares are expected to be admitted to trading on AIM on or around 7 February 2023.
W H Ireland is acting as bookrunner in connection with the Placing. The Placing Shares are being offered by way of an accelerated bookbuild, which will be launched immediately following this Announcement, in accordance with the terms and conditions set out in Appendix II to this Announcement.
Admission of the Placing Shares is conditional, inter alia, upon the placing agreement dated 31 January 2023 between the Company and the Bookrunner not having been terminated and becoming unconditional in respect of such shares.
The Placing is conditional upon, amongst other things:
- admission of the Placing Shares becoming effective by no later than 8.00 a.m. on 7 February 2023 (or such later time and / or date as the Company and the Bookrunner shall agree, not being later than 22 February 2023);
- the delivery by the Company to the Bookrunner of certain documents required under the Placing Agreement;
- the Company having fully performed its obligations under the Placing Agreement to the extent that such obligations fall to be performed prior to admission of the Placing Shares; and
- the Placing Agreement not having been terminated by the Bookrunner in accordance with its terms.
The timing of the closure of the Bookbuild and the allocation of the Placing Shares to be issued at the Placing Price are to be determined at the discretion of the Company and the Bookrunner.
Reasons for the Placing and Use of Proceeds
The Company is undertaking the Placing to progress its corporate and operational strategy and the net proceeds will therefore be applied towards:
- On its Pilot Licence by funding progress towards the Field Development Plan;
- Licence fees; and
- For general working capital purposes.
Working Capital Position
As set out in the announcements dated 29 November 2022 and 11 January 2023, the Company has a number of initiatives it is progressing and the Directors remain enthusiastic and confident about the potential for Pilot to be a key UK Continental Shelf development project. The Company's cash at the date of this announcement is c.£223,000 (excluding placing proceeds) and therefore c£723,000 (including placing proceeds). The Company's current cash burn rate is £140,000 per month. The Company is investigating other sources of funding to supplement its proposed activities over the next 12 months.
Further updates will be provided as appropriate.
Settlement of Invoices
Alisanos Geoscience Limited, which has provided the services of certain geoscience consultants to the Company, is currently owed £90,000 by the Company. The majority of this amount is for services over the last four months. The Directors of the Company intend to settle the Outstanding Invoices by way of the issue of ordinary shares in the Company at the Placing Price. Accordingly they intend to issue 900,000 ordinary shares in the Company to Alisanos Geoscience Limited (or other parties as it so directs).
Admission to trading
Application will be made to the London Stock Exchange for admission of the Placing Shares and the Invoice Shares to trading on AIM. It is expected that admission will become effective and dealings in the Placing Shares and the Invoice Shares will commence at 8.00 a.m. on or around 7 February 2023.
The Placing is not being underwritten and the Placing is not conditional on a minimum amount being raised.
Source: Orcadian Energy
