1947 Oil & Gas (LSE:1947) began dealings on AIM after issuing 500 million shares at 10p, valuing the company at approximately £65.1 million.
Of that total, 202.5 million shares went to Renaissance Offshore Holdings as consideration for the acquisition of Renaissance Offshore, while a placing of 297.5 million shares raised new money from institutional investors. Renaissance is a privately held Houston-based producer with interests in eleven shallow-water fields on the Gulf of America continental shelf, mostly in federal waters off Louisiana.
The deal, completing on admission, gives 1947 its first asset and an immediate production base.
Independent reserve auditor NSAI has certified 1P net reserves of 15.0 million barrels of oil equivalent (MMboe) and 2P reserves of 19.7 MMboe, with a 2P present value at a 10% discount rate (PV10) of $346 million, against a headline acquisition cost of $65 million.
Placing proceeds, together with remaining funds from an earlier pre-IPO fundraising, will cover the cash consideration for the acquisition, with the balance going to working capital and admission costs.
"1947 now has exposure to immediate cash flows and a foundation upon which to build and grow a company of scale," said Executive Chairman Tim Duncan.
Co-President Ivan Murphy said the team had worked with Renaissance for two years to build "the perfect platform on which to consolidate production assets around the Gulf of America."
The company expects to start a progressive dividend policy, beginning with an interim payout following results for the half-year to 30 June 2027.