Valiant Petroleum said yesterday it had placed new shares to raise about £66.5million from both existing and new institutional investors.
The oil firm said the proceeds would be used to complete its committed work programme in the North Sea for this year and next, including exploration wells on the Handcross, Tybalt and Viola prospects targeting about 305million barrels of oil equivalent net to Valiant.
Valiant added that success on any one of these prospects, given their size relative to its resource base, would potentially have a substantial impact on the group.
It said that at June 30 it had gross debt of £119million and cash in hand of £30.8million, with access to further debt of £15million and an additional £12.5million through banking facilities.
Valiant added that its financial position, along with its anticipated cash flow from the producing West Don and Don Southwest fields, would allow it to complete its committed work programme for 2009 and 2010 and maintain its debt covenants.
It said the directors felt the group’s ability to pursue additional opportunities in its portfolio would be limited in the near term, adding that the placing proceeds would allow it to maintain operational and financial flexibility, accelerate its capital expenditure programme and maintain substantial equity stakes in its asset portfolio while also managing its debts.
Valiant said that, as forecast, the placing would allow it to pursue a capital expenditure programme next year and in 2011 of more than £187.5million. This is expected to include development of the Don Southwest Horst and Area 6 panels, drilling of an appraisal well on the Don Southwest H panel and an exploration well on the Don Southwest E panel.
Other near-term plans include drilling of a third production well on West Don and side-track into the Ariel exploration prospect, development of the Causeway and Crawford fields and appraisal of the Banquo discovery.
Valiant said the directors anticipated that the placing proceeds would be supplemented by debt finance on certain development assets plus the potential farm-down of interests on some of the exploration wells.