Irish exploration firm raises €13.3m with share placing

Petroneft Resources — the Irish exploration company with a focus on the Russian market — has successfully raised $17.25m (€13.3m) via a share placing with institutional and other investors.

The Dublin-headquartered company — which holds two licences in the Russian region of Tomsk — said that $7.5m of the proceeds will be used for part repayment of its loan facility with international investment bank, Macquarie.

Some $1m worth of the company’s remaining debt facility with Macquarie will also be converted into equity, used to retain the bank’s shareholding in the business.

The balance of the proceeds raised will be used by Petroneft to finance the continuation of its 2012-2013 development programme regarding its Arbuzovskoye field — one of five fields in Petroneft’s Licence 61 asset — and for working capital purposes and to cover transaction costs.

Petroneft’s chief executive Dennis Francis said management was pleased with the outcome of the placing and “the high level of support received from both new and existing institutional shareholders”.

“The combination of the results of recent Arbuzovskoye wells and stable financing base will allow management to continue to focus on materially increasing our production profile and cash flows, substantially increase the value of our reserve base and focus on the numerous corporate development opportunities available to us,” he added.

Management has also said that discussions regarding farm-out agreements on Licence 61, “with a number of parties”, are ongoing, with any deals not expected to be formally announced until next year.

“Positioning the company so that it can fully exploit the opportunities available to it is of crucial importance,” management added.

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