LONDON -- Sound Oil
The oil explorer, which has operations in Italy and Indonesia, is raising fresh money from Astin Capital Management, a London-based investment manager, and also plans to raise up to 1 million pounds from existing shareholders early next year.
The precise amount raised from Astin will depend on Sound Oil's average share price over seven separate trading periods, commencing on July 25, 2012, and finishing in February 2013.
Sound Oil said that the amount raised will total 6 million pounds after costs, should its share price remain at the same level throughout the entire period. As part of the deal, all existing warrants in Sound Oil have been canceled.
Obviously, Sound Oil's management is hoping that the company's share price will rise in the coming months, and that this will enable a lot more than 6 million pounds to be raised, and in a manner that will prove less dilutive for current shareholders. Should the share price fall in the next several months, there are provisions in place to ensure sufficient funds are still raised.
Within the same announcement, there was less-promising news regarding Sound Oil's Strombone prospect. In early June, the company said it was in separate funding talks to fund an appraisal well at the end of 2012. However, due to delays in getting the necessary permits, this well now looks set to be drilled in early 2013, and the related funding discussions have been terminated.
Gerry Orbell, Sound Oil's chairman and chief executive, commented: "This placement enables Sound to cover the anticipated additional expenditure in Citarum, including the completion of the complex Jatayu well and the forthcoming Geulis and Cataka wells, all of which will be drilled continuously throughout the rest of the year... [this]secures Sound Oil well into 2013, well beyond our near term operations."
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