- Microcap oil and gas explorer Prominence Energy (PRM) is gearing up to finally raise some funds and restart work at its Bowsprit Oil Project in Louisiana
- The company snapped up full interest in the project in July 2019 and has since been seeking a farm-out partner to help work on the area
- However, Prominence said as it was about to lock in a deal, the COVID-19 pandemic struck in March
- As such, the company had just $9000 in the bank at the end of March and had to cut costs and rely on loans from its Chairman to stay afloat through June
- Now that markets have somewhat-stabilised, the company will be raising some fresh capital and trying to finalise a farm-out deal
- Shares last closed for 0.7 cents each and are slated to reopen on Friday morning
Microcap oil and gas explorer Prominence Energy (PRM) is gearing up to finally raise some funds and restart work at its Bowsprit Oil Project in Louisiana, U.S.
The company snapped up full interest in the project in late July 2019, but this year has been chasing a farm-out partner to cover some of the operating costs as cash reserves bleed out.
The company said it was about to lock in a farm-out deal in March, but the plans were disrupted by the onset of the COVID-19 pandemic. This means at the end of March, Prominence had just $9000 in the bank and no partner to help move Bowsprit drilling along.
As such, the company planned to cut costs dramatically over the June quarter and Prominence relied on personal loans from Chairman Ian McCubbing and other directors and major shareholders in order to stay afloat. The company said in April it would be looking to raise capital as soon as markets stabilise.
As such, the upcoming capital raise is likely more of a relief than a surprise to shareholders.
Details of the raise are yet to be announced, but Prominence said it will raise the funds through sophisticated investors and the cash will go towards the Bowsprit project and general working capital.
The company’s shares are frozen until Friday, at which point further details are slated to be announced.
Two weeks ago, Prominence said it was aiming to lock in a farm-out deal and funding arrangements over the next few weeks, with plans to start drilling before the end of the year.
Shares in Prominence last closed worth 0.7 cents each. The company has a $923,700 market cap.