AIM-listed Mayan Energy raises cash to buy stake in Block Energy

The AIM-listed oil and gas company raised £587,500 before expenses at a price of 0.3p per share and a discount of 37.5% to the closing mid-market price on 26 June 2017, and also agreed to issue 60m ordinary shares at the Placing Price in settlement of £180,000 in adviser fees and outstanding creditors.

Subscription proceeds of £300,000 would be used to invest into Block Energy, a NEX listed exploration and production company focused on the acquisition of discovered oil fields in and around the Caucuses with prime interests in Georgia, as well as ongoing working capital for US operations.

The group intended to use those proceeds to increase Block's interest in the Norio PSA, completed a CPR, reserve report and to prepare an IPO, all of which could provide additional working capital for the group.

Investment of £300,000 in Block Energy would be structured as follows: £90,000 equity investment via a placing of new shares at £0.0085 per share would result in Mayan acquiring a 2.47% equity interest in Block Energy and £210,000 by way of a convertible loan note.

In accordance with the terms of the instrument, the latter would accrue interest at a flat rate of 10% per annum and a long stop repayment date of 24 months after the date of the instrument, but is repayable on written notice from the Company which may be issued no earlier than 12 months after the date of the Instrument.

Additionally, the company said Charlie Wood was to become Non-executive Chairman, replacing Ross Warner who was to resign immediately as chair.

Eddie Gonzalez, Mayan's CEO, could be issued 6,666,667 shares on the same terms of the subscription, following the publication of the Company's accounts for the year ended 31 December 2016.

They would be issued in settlement of accrued salary owed to Gonzalez.