Latest update November 24th, 2024 1:00 AM
Latest News
- Windfall taxes do not violate petroleum contract – T&T Energy Expert
- All oil projects in Guyana performing above expectation in the world’s premier deepwater zone- Exxon CEO tells shareholders
- More than 100 Palestinians killed in Israeli attacks on Gaza in 48 hours
- GECOM to continue discussions on introducing biometrics before engaging stakeholders
- Corentyne fire that killed mother and four children maliciously set – GFS
CGX Energy raises US$21.8M through Equity Rights Offering
CGX Energy Inc was able to raise approximately US$21.8M through the completion of its previously announced Rights offering. Part of this money would be used to settle outstanding company debt while providing more resources to support its planned exploration work offshore Guyana.
Pursuant to the Offering, the Corporation issued to holders of its outstanding common shares, an aggregate of 116,102,318 transferable Rights. Each Right entitled the holder thereof to subscribe for one Common Share upon payment of the subscription price of $0.25 per Common Share. 
Frontera Energy Corporation, an insider and the Corporation’s largest shareholder, acquired an aggregate of 101,316,916 Common Shares in connection with the Offering. Frontera now owns an aggregate of 157,383,129 Common Shares which represents approximately 67.78% of the issued and outstanding Common Shares following closing. In consideration for the standby commitment provided by Frontera under the Offering, Frontera received five-year warrants to purchase up to 15,009,026 Common Shares at an exercise price equal to $0.415 per Common Share.
As a result, Frontera holds an aggregate of 212,392,155 Common Shares on a partially-diluted basis (assuming conversion of the US$8.8 million principal amount under the bridge loan agreement between CGX and Frontera), which represents approximately 73.95% of the issued and outstanding Common Shares on a partially-diluted basis.
Kaieteur News understands that CGX will use US$ 7,904,036 of the net proceeds of the Offering to settle its debt to Japan Drilling Co., Ltd. in connection with historic legacy indebtedness. The remainder of the net proceeds of approximately US$13,923,744, along with the additional funding obtained through a farm-in joint venture agreement with Frontera in respect to the exploration and development of the Corentyne and Demerara blocks in Guyana, as previously disclosed, as well as additional financing alternatives, are expected to provide the funds necessary to meet all of the Corporation’s short-term liquidity requirements over the next 12 months.
Professor Suresh Narine, Executive Chairman of CGX stated, “The successful completion of the Offering, in which CGX sought to ensure that its shareholders were provided an opportunity to participate in the Corporation’s restructuring of its debt and advancing its exploration programme in Guyana, signals strong support for CGX in its ongoing operations and prospects.”
He said that the completion of the Offering, which was oversubscribed, along with the joint venture that was previously announced between CGX and Frontera, one of the company’s largest shareholders, also further enhances CGX’s position in the Guyana basin.
“I wish to thank our loyal shareholders and the Government and People of Guyana for their continued support for CGX, which is widely regarded as Guyana’s “indigenous” oil company. CGX is delighted with this latest endorsement of its activities in the basin,” the Chairman concluded.
Similar Articles
THE BLUNT OF THE DAY
Sports
Features/Columnists
Jagdeo’s idea of transparency
…Peeping Tom kaieteur News- Transparency, as conceived by Vice President Bharrat Jagdeo, seems to be a peculiar exercise... more
Rising Gun Crimes in the Caribbean: Urgent Action required by all
By Sir Ronald Sanders Kaieteur News – There is an alarming surge in gun-related violence, particularly among younger... more
Weekend Cartoon
