NG Energy, a Canada-based exploration and production company, announced this Friday it has closed a non-brokered private placement of 8,000,000 units; each unit worth C$1 for total gross proceeds of C$8 million. The funds will accelerate the development of the company’s drilling project in Colombia.
Firstly, each of the units placed by the company consists of one common share and one share purchase warrant. With each of those, the holder could purchase one additional share at C$1.20 for 24 months; from the date of issuance, expiring on October 22, 2023.
Moreover, the additional shares are subject to potential accelerated expiry. If the closing price of the common shares of the company on the TSX Venture Exchange is equal to or exceeds C$2.00 for twenty consecutive trading days.
In addition, the company underlines that all securities issued in connection with the private placement are subject to a four-month and one-day statutory hold period expiring on February 23, 2022.
On the other hand, as outlined above, the company said in the statement that the funds would accelerate the drilling program at SN-9. This is a 311,353 acres block adjacent to Canacol’s Nelson field, in the region of La Guajira, Colombia. The company is currently an upstream operator to bring energy solutions to the Latin American country.
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NG Energy to develop top oil project in Colombia
Indeed, NE Energy’s team has extensive technical expertise and a proven track record of building companies and creating value in South America.
Furthermore, back in September, NG Energy received by Colombian authorities the environmental license. This license allowed the company to start exploratory drilling in the block.
It also included permission for civil works, production infrastructure; and the construction of up to 11 locations for a total of 22 wells. Back then, the company started construction of the road and pad for the first well, Magico-1X. The whole SN-9 block has 51,9 billion cubic feet of estimated oil resources.
Finally, all of these activities will be accelerated by the company’s private placement. Particularly, the proceeds will allow the drilling rig to move seamlessly from location to location, saving several weeks per well.
