Chaco Resources plc (soon to be renamed Amerisur Resources plc), the oil and gas explorer and developer focused in South America, is proposing to raise £15 million before expenses, by way of a placing with institutional and other investors, arranged by Blue Oar Securities Plc. 250 million new ordinary shares of 0.1 pence each in the capital of the Company ('Placing Shares') have been conditionally placed at 6 pence per new ordinary share.
The net proceeds of the placing will enable the new management team, led by Giles Clarke, Non-Executive Chairman, and Dr John Wardle, Chief Executive Officer, to implement a new strategy focused on advancing projects that are expected to provide near term value for shareholders. The placing will enable the Company to:
• Complete its initial programme of evaluation and appraisal of the Platanillo discovery in Colombia and commence production, which will require approximately £4.5 million;
• Invest approximately £3 million to complete a full 3D seismic evaluation of the Fenix block in Colombia and, should the Company elect to enter Phase 2 to perform initial drilling on that block;
• Invest approximately £5 million in new late-stage projects in Colombia where the Directors see a strong probability of production within 12 months of commencement. Within this £5 million, provision is expected to be made for a third well in Platanillo, if appropriate; and
• Provide the Company with approximately £1.25 million of working capital.
Additionally, the Company intends to make further investments in Paraguay in surface geophysical evaluation and some focused seismic surveys to support the Company in determining its future strategy in Paraguay.
The new ordinary shares will rank pari passu in all respects to existing shares, and the placing is conditional on certain resolutions having been passed at the AGM and on the shares admission to trading on AIM ('Admission'). The AGM is expected to be held on 28 June 2007 and application will be made for the new ordinary shares to be admitted to AIM with trading expected to commence on 29 June 2007. On Admission, the Company will have 805,434,554 Ordinary Shares in issue.
At the AGM a resolution will be put to shareholders proposing a change of name to Amerisur Resources plc. The new name reflects the Company's geographic area of activity. The Company will shortly be sending to its shareholders a circular containing a notice in respect of the AGM and an announcement will be made when the circular is sent.
Giles Clarke, Chairman said:
'The new management team is focused on delivering our strategy of providing value for shareholders by concentrating on our late stage projects with near term production potential to deliver cash flows. We believe that we will start to deliver this during this financial year.
'With an outstanding team led by Dr John Wardle in place, stringent geological and economic ranking criteria for all new venture opportunities, an innovative approach to drilling and production operations, and a clear focus on achieving production, we are confident about the Company's future.'
