Troubled oil and gas exploration firm Sterling Resources has agreed to sell more than 73million shares in the company to a syndicate of underwriters led by Casimir Capital for £35million.
Last week, Dutch multinational energy and commodity-trading group Vitol made a £123million cash bid to take over Sterling, which has North Sea interests. Sterling said this week the share offering would mean it was funded until June. Chairman Walter DeBoni said: “On February 6, we announced an update on both our near and longer-term capital requirements, and we are very pleased with the offering which has addressed our near-term capital needs.
“Equally important, the offering will provide us with the appropriate time to undertake a thorough and systematic review of all of our strategic alternatives . . . in response to the unsolicited offer from Vitol.”
Sterling said last week it would consider the Vitol offer, but that it would also be continuing discussions with others on potential deals such as a merger, sale of parts of its business or other financing options.
Analysts said the offer undervalued Sterling’s assets, particularly its exploration portfolio offshore Romania, but given its financing issues it was a good deal.
Sterling, which also has assets in the North Sea and France, has been struggling to find funding since last year and said recently it was deferring some payments to see it through to next month.
Sterling’s woes stem from its North Sea Breagh project, which has faced delays and cost overruns.
Costs on the project have risen to £632million, from £485million, with first gas pushed back from July last year to next month.