Black Mountain Energy (ASX:BME) taps investors for $4.25m for Half Moon prospect purchase, US

• Black Mountain Energy (BME) launches an entitlement offer to raise up to $4.25 million to fund its purchase of the Half Moon oil and gas prospect in New Mexico
• Under the offer, eligible shareholders can buy two new BME shares for every three shares already held, with the new shares to be priced at 2.5 cents each
• BME will use the money to fully fund the US$2 million (A$2.9 million) Half Moon purchase, with a portion of its new cash to go towards its Valhalla gas project in WA
• The offer will open on February 28 and is expected to close on 9 March, 2023
• Shares in Black Mountain Energy are down 20 per cent to 3.2 cents at 10:40 am AEDT

Black Mountain Energy (BME) has launched an entitlement offer to raise up to $4.25 million to fund its purchase of the Half Moon oil and gas prospect in New Mexico.

Under the offer, eligible shareholders can buy two new BME shares for every three shares already held, with the new shares to be priced at 2.5 cents – a 37.5 per cent discount to BME’s last closing price of 4 cents on February 17, and a 39.6 per cent discount to the company’s five-day volume-weighted average price.

Shareholders who take up their full entitlement will be given the chance to apply for additional new shares at the same price under a shortfall offer.

Black Mountain first flagged its intent to buy the Half Moon prospect for US$2 million (A$2.9 million) in late January. According to the company, the prospect comprises eight operating wells and leases in the northwestern corner of the US Delaware Basin.

Black Mountain plans to fund the buyout fully from the proceeds of its entitlement offer. Further to this, the company will put a portion of the new cash towards its work to commercialise its flagship Valhalla natural gas project in the Canning Basin region of Western Australia.

The entitlement offer is renounceable, meaning shareholders who do not wish to take up their entitlement can sell their rights on to another person.

The offer will open on February 28 and is expected to close on 9 March, 2023

Shares in Black Mountain Energy were down 20 per cent to 3.2 cents at 10:40 am AEDT.