MX Oil raises £2.5m ahead of Nigeria deal

MX Oil shored up its available funds as it prepared for a quick-turnaround transaction in Nigeria on Monday, announcing the successful raising of £2.5m via a placing of 333,333,333 ordinary shares and 66,666,667 warrants over ordinary shares.

The AIM-traded oil and gas investing company said the placing was oversubscribed, and the proceeds would be used to make the final payment in connection to its investment in Nigeria prior to the start of oil production.

It was previously announced that the first payment due from GEC Petroleum Development Company with regard to its proposed purchase of MX Oil's Nigerian investment was expected around 14 March.

"We felt that it made sense to avoid any timing risk with regard to the funding of our Nigerian investment prior to it commencing production by ensuring that we had our own funds in place in order to make this payment," said MX Oil chief executive officer Stefan Oliver.

"We will update the market shortly with regard to the funds expected from GPDC and also on the progress being made in Mexico," he added.

Application was yet to be made for the placing shares to be admitted to AIM, but the company said it was expected that admission would become effective on or around 18 March. The placing shares would rank pari passu with the existing ordinary shares.

Another AIM-traded company, Onzima Ventures, announced it had participated in the placing, subscribing for 20 million shares at 0.75p per share for a total sum of £150,000. It had also received four million warrants exercisable at 1p per share, for a period of three years.

At the same time, MX Oil revealed it was discussing the possibility of assigning three of its four Mexican interests to its joint venture partner, Geo Estratos, in return for an increased interest in one licence, Tecolutla, and a cash payment to the company.