CGX Energy Closes $73.6 Million Rights Offering

CGX Energy (TSXV: OYL) announced today that it has closed its previously announced rights offering. The offering yielded gross proceeds amounting to $73.6 million.

Per the terms of the offering, the firm offered an aggregate of of 45,151,338 common shares. Each holder of a share was offered a right on the basis of 0.157 of a right for each share held. Each whole right will enable a shareholder to acquire an additional share of the company at a price of $1.63 per share.

Out of the offered number of shares, the firm’s largest shareholder, Frontera Energy (TSX: FEC), acquired a total of 45,083,314 common shares pursuant to its exercise of rights. In addition, it also received 5-year warrants to purchase up to 1,173,774 common shares at US$1.51 per share.

The latter now holds 78.79% of the company on a partially-diluted basis, assuming that that conversion agreement related to the US$19 million bridge loan will transpire and the warrants will be fully exercised.

Proceeds from the offering is to be used for the exploration and development of the Corentyne and Demerara blocks off the shore of Guyana, as well as the onshore blocks of Berbice. Funds will also be used for the development of the firm’s deep water port in Guyana.

CGX Energy last traded at $1.29 on the TSX Venture.

Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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