LONDON (Alliance News) - Max Petroleum PLC Monday said it has raised GBP37.1 million through a cash subscription by AGR Energy Ltd No.1, which gives the investor a 51% majority of the enlarged share capital of the company.
The Kazakhstan-focused oil and gas company said AGR conditionally subscribed for 2.3 million shares at a price of 1.64 pence per share, which is a premium of 34% to its closing middle market price of 1.225 pence on August 1.
Max Petroleum shares were up 21% to 1.48 pence early Monday, putting the amongst the top three AIM All-Share risers.
The news comes after the company announced a strategic review in late July, which it said could result in a merger, the sale of the business, a farm-down, or a disposal of its assets.
The review came just a month after Max Petroleum's shares slumped by a quarter after it said its proved and probable reserves, which include new drilling results from 35 wells, fell significantly when compared with the previous year.
AGR Energy is a vehicle owned by the Kazakhstani Assaubayev family, which has been actively involved in running various businesses linked to the development of the country in recent years, with long-term investments in both natural resources and mining operations.
Max Petroleum said the deal should enable it to fund its planned capital programme to develop fields and maximise reserves and production.
The company said it will also be in a strengthened position to attract financial or industry partners to help finish its NUR-1 well and to secure an extension of the exploration period of its Blocks A&E Licence in western Kazakhstan.
It added that it will also be able to consider investment in other projects in Kazakhstan and across Central Asia that complement its existing activities.
The company said the previously announced strategic review will continue despite the deal.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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