ASX-listed Prominence Energy NL (ASX: PRM), on 31 December 2019, announced to have secured short-term funding in the form of a convertible note from a group of supportive existing shareholders including GTT Ventures, which holds a 50 per cent stake. Fastlane Australia Pty Ltd (25%) and Bellarine Gold Pty Ltd (25%) are the other shareholders that accounted for the convertible note.
PRM is an oil and gas exploration and development company, with major asset - the Bowsprit oil project located offshore Louisiana. Currently, the company is in discussions with prospective funding groups including farminees in order to obtain funds required for drilling the first well at the project. The company has obtained all the permits needed to drill the well.
Terms of Convertible Note
Through the way of an unsecured convertible note, PRM will raise $ 250,000. Provided the note is not exercised prior, it will be repayable on 31 March 2020. The price of the conversion will be the lower of 20 per cent discount to volume weighted average price (VWAP) of the 5 trading days immediately preceding the date of issue or at a 20 per cent discount to the share price achieved for an equity-based capital raising conducted during the term of the note.
At maturity, the coupon rate is 10 per cent per annum. The company intends to issue 12.5 million unlisted options with an exercise price of $ 0.004 and scheduled expiry on 31 December 2020, based on 1 option for every $ 0.02 loaned via the convertible note.
The proceeds from the convertible note are planned to be directed towards working capital required to progress the current farm-out discussions to a conclusion.
General Meeting to Secure Approval for Issue of Shares and Options
On 2 January 2019, Prominence Energy released a market update, regarding the General Meeting on 30 January 2020 in order to consider the following resolutions:
- Resolution 1 – Pre-Approval for the issue of shares under Convertible Note Agreement to GTT Ventures, which is the corporate advisor of PRM and deemed to be an associate of Patrick Glovac, one of the non-executive directors of PRM.
- Resolution 2 – Pre-Approval for the issue of shares under Convertible Note Agreement to Fastlane Australia Pty Ltd (Fastlane).
- Resolution 3– Pre-Approval for the issue of shares under Convertible Note Agreement to Bellarine Gold Pty Ltd (Bellarine).
- Resolution 4 – Approval for the issue of 6.25 million options to GTT in lieu of fees and expenses.
- Resolution 5 – Approval for the issue of 3.125 million options each to Bellarine and Fastlane in lieu of fees and expenses.
In August 2019, the company unveiled a capital raising program with GTT Ventures, undertaking the placement to raise $ 615k before costs. More on the deal reached between the two players can be read here.
The stock of PRM last traded at $ 0.002 on 30 December 2019, with a market cap of $ 2.64 million. The last six-month return of the stock stands at 33.33 per cent.
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