BAKU, Azerbaijan, Apr. 1
By Nargiz Sadikhova - Trend:
In order to fund short-term cash obligations, Tethys Petroleum Limited which operates in Kazakhstan and Georgia has decided to pursue a private equity placement for 2.5 million ordinary shares at 0.67 CAD per share (1.7 million CAD), Trend reports citing the company.
The company said these proceeds will be used to fund previously incurred drilling expenses, 3D and 2D seismic expenses as well as selling, general, and administrative expenses.
“The placement is to Pope Investments II, LLC, an investment fund managed by Pope Asset Management, LLC. William Wells, the Chairman of Tethys Petroleum is the President of Pope Asset Management, LLC and has a minority ownership interest in Pope Investments II, LLC. The private placement is considered a Related Party Transaction as defined under Multilateral Instrument 61-101 since Mr. Wells is the Chairman of the Company,” the company said.
The transaction is exempt from the valuation and minority shareholder requirements thereunder since the consideration in the transaction is less than 25 percent of the market capitalization of the company. This placement is conditional upon receiving approval from the TSX Venture Exchange, the company said.
Tethys is also in the process of trying to secure a line of credit up to $30 million from a Kazakhstan bank. This line of credit would be for five years at a rate of 6 percent. This financing is key for the Company’s operational plans for 2021.
Tethys is focused on oil and gas exploration and production activities in Central Asia and the Caspian Region.
The company operates four contracts in Kazakhstan: Kyzyloi Production Contract and Akkulka Production Contract (gas contracts), Akkulka Exploration Contract (includes Doris oil field and others), and Kul-bas E&P Contract.
The company plans to increase existing gas production by drilling new wells and tying in existing ones. The company is also in the process of discovering exploration upside potential from the Klymene prospect in the Kul-Bas area.
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