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Providence shareholders have till Tuesday to exercise 3p warrants
Oil explorer sees 103 million options as yet unused
Shareholders who backed last year’s €3m capital raise by Providence Resources have until next week to exercise 103 million of remaining ‘3p warrants’ to add to their stake in the oil explorer at less than the current market price.
The warrants allow investors add to their stake in the oil and gas explorer at a pre-set price of three pence per share, which is slightly more than 10pc below the level the stock traded on the market last night.
The warrants were issued last year to shareholders who contributed to a €3m capital raise. Each investor received a mix of ordinary shares and the same number of so-called 3pc and 9p warrants that give them a right to buy additional shares at those pre-set prices.
Since September last, Providence has raised more than £1.5m (€1.72m) from warrant holders exercising 3p shares, including more than £365,000 in a deal this week.
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The right to exercise the 3p warrants runs out on May 6 and there are 103 million options still unused. The 9p warrants have another year to run, but Providence shares would have to almost triple in value before they came into play.
The company announced yesterday that it had raised the latest £356,000 from 3p warrant holders, which followed earlier take-up of warrants in September, October, December and February. The latest shares were taken up by private investors via a Davy nominee account.
It comes just days after Providence Resources terminated an important farm-out agreement with Norway’s SpotOn Energy, which was to have taken over the costs of pressing ahead with exploration in the Barryroe licence area off the coast of Cork.
The farm-out was conditional upon SpotOn confirming that a minimum of $166m (€137m) in funding was in place for the early development programme. Shares had been trading at 3.65 pence last week before news the farm-out deal was off the table.
The agreement was terminated because “key financing conditions were not met”, according to a statement from Providence.
Providence is looking to raise $5m to carry on alone. Nick Furlong’s Pageant Holdings, already a substantial shareholder in Providence, has offered to underwrite a capital raising of $2.5m at 3p per share, under a plan which includes a one-for-one warrant – potentially raising the same amount again over time.
Providence has said it is working on a number of options to further the development of the Barryroe site including payment deferrals by individual service providers and a Nordic bond issue of around $80m.
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