NZ Energy Corp secures funding with director’s assistance
New Zealand Energy Corp has cobbled together the financial backing it needs to complete the long-delayed purchase of gas assets from Origin Energy, including a C$1 million contribution from an unnamed director to get it over the line.
The Vancouver-based Taranaki oil explorer and producer has struggled to raise the C$33.7 million it needs to buy the Tariki, Waihapa and Ngaere petroleum mining licences and associated production facilities from Australia's Origin Energy.
In the process of finding the funds, NZ Energy Corp has extended deadlines and earlier this year brought in New Zealand-based L&M Energy to form a 50/50 joint venture, with L&M meeting half the purchase cost.
The company has met the finance condition precedent to allow the transaction to go ahead, largely by raising some C$7.9 million in subscription receipts, priced at 33 Canadian cents each, to make up its half of the purchase price. It had already made a C$6 million deposit and is putting in a further C$1.5 million of its own cash.
"A director of NZEC subscribed for 3,030,303 subscription receipts," the company said, but it "was not able to give prior notice of the subscription as a result of the timing of the requirement to meet the financing condition precedent to the acquisition."
At 33 cents apiece, that makes the director's contribution worth C$999,999.99.
The director's purchase fell below thresholds requiring formal valuations and minority approvals.
The company continues to seek a further C$7.1 million through subscription receipts to top up working capital, which became depleted by a series of technical challenges and disappointing production results from existing wells.
NZEC listed on the Toronto Stock Exchange in August 2011, raising just over C$21.9 million in its initial public offering. The company raised almost C$63.5 million in March 2012, though its market capitalisation has tumbled over the past 12 months, with its shares falling from a peak of C$3.19 to as low as 33 Canadian cents, wiping about C$350 million off the value of the company. Its shares are quoted on the company's website at 36 Canadian cents.