FirstAfrica Issues New Shares to Raise US $46.76 million

FirstAfrica Issues New Shares to Raise US $45.76 Million
Gabon News 6/15/2006
FirstAfrica Oil PLC said it plans to raise US $45.76 million in a placing of 765 million new shares at US $1.84 each (sterling/dollar exchange rate as of June 14th).

FirstAfrica announced on May 24 that it would be seeking to raise up to US $65 million, inclusive of expenses, in a placing of new ordinary shares. This amount included US $11 million relating to the possible acquisition of Energem Chad. As previously announced, the company did not conclude the acquisition of Energem Chad but it said a similar amount will be required to cover work commitments and signature bonus in the event the company acquires Energem Chad in the future.

The net proceeds of the placing will be applied to the development of the company's 100% owned East Orovinyare Field offshore Gabon. The board said its commercial assessment is that the proceeds are sufficient for FirstAfrica's current purposes.

It also said discussions are progressing in relation to concluding project financing that will be required for the final phase of the project in the fourth quarter of the year and the company continues to review other sources of funding, including trade finance and/or further new equity to cover the anticipated additional completion costs of around US $9 million.

FirstAfrica said results from the offshore Gabon well in the East Orovinyare Field are expected to be announced shortly. The company's field development plan calls for production to start early next year.

The board said the platform construction and additional infrastructure development is moving in parallel with the drilling program and installation of the platform and downhole pumps is planned for Q4 2006.

In addition to the development field, the company has other exploration assets in Gabon and it said it plans to fund exploration activities from cashflow in 2007.