Predator Oil & Gas Holdings (LSE:PRD) announced it has conditionally placed 166.67m new shares at 1.5p each to raise £2.5m before expenses.
The junior resource company, which has producing hydrocarbon operations in Trinidad and Morocco, priced the placing well below its last raise in May, when it issued shares at 3.5p to collect £3m for the same broad programme of Trinidad and Morocco appraisal work.
Additionally, each placing share carries one attached warrant exercisable at 2.5p for 24 months, and the company is also issuing 11.67m broker warrants at the placing price, expiring in 36 months.
Net proceeds are earmarked first for Trinidad production growth: expanding Snowcap-3's production facilities for higher initial throughput, hot-stacking the drilling rig at the well site so it stays ready for further development wells, and funding testing on up to two Goudron infield development wells to be drilled by NABI Construction under the existing Master Services Agreement.
The company said it wants to retain the majority of production upside from those Goudron wells to help fund a potential gas-to-power option for data centres using stranded gas.
On Morocco, Predator said large domestic companies are moving into the country's gas sector to fund appraisal, development and upstream exploration, a shift it called a welcome strategic development, and said it is well placed to conclude partner negotiations once MOU-6 well test results are released.
The company drilled MOU-6 to a planned depth of 950 metres, reaching the top of its primary TGB-6 Submarine Fan target with a gross upper interval of 21.2 metres, and said perforating and testing are under way with final results expected within two weeks.
Proceeds will also fund planning and long-lead inventory to deepen the MOU-5 well by at least 640 metres to test for helium potentially associated with thermogenic gas sealed by Triassic salt, and to evaluate gas storage potential in the anticipated salt section.
The company is commissioning its first study into potentially large unconventional biogenic gas resources across an area of up to 120 square kilometres, working with a Romanian partner with experience in analogous sequences in western Ukraine and Romania, where Predator noted a comparable basin has been producing biogenic gas since 1924 and was later converted into Europe's largest gas storage network.
Snowcap-3, in Trinidad's Cory Moruga licence, has received regulatory approval, with drilling now expected to start in November.
The Goudron field has delivered heavy workover results at GY 664 and GY 665, lifting output to 37 and 18 barrels of oil per day respectively.
Dr Stephen Boldy, Predator's non-executive chairman, said the placing targets "a window of opportunity to accelerate production growth in Trinidad to avail of higher oil price and economies of scale," adding that drilling and well testing costs have risen due to inflation linked to the Middle East conflict and that the company needs to stay well capitalised as it works toward a Corrib South successor authorisation, which he said could extend the life of the Corrib gas infrastructure and reduce Britain's import dependence.
Predator said it is also liaising with Irish regulator DCCE to support its financial review of Corrib South, allocating £10,000 of the proceeds to that effort, with the authorisation decision described as potentially closer.
