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Alpha Energy to place 46m new shares for up to S$5.175m

CATALIST-LISTED oil and gas firm Alpha Energy announced on Sunday that it is placing out 46 million new shares for S$0.1125 apiece to PrimePartners Corporate Finance to raise up to S$5.175 million.

PrimePartners Corporate Finance is headquartered in Singapore and focuses on providing advisory and capital raising services for private and public-listed small and medium sized companies.

Assuming the placement is fully subscribed, the placement shares represent approximately 12.96 per cent of the existing issued and paid-up share capital, and approximately 11.47 per cent of the enlarged issued and paid-up share capital (excluding treasury shares) after the placement.

The issue price of S$0.1125 represents a discount of 10 per cent to the volume weighted average price of S$0.125 for trades on Alpha Energy’s shares on Sept 12, which is the last full market day which the shares were traded prior to its trading halt.

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The group said that the placement will strengthen its financial and working capital position in view of its plans in relation to the consolidation of its interest in the Mustang Project as announced on Sept 29, 2018.

The Mustang project is an oil prospective project in Alaska.

Separately, Alpha Energy announced transactions that will bring its working interest in Mustang to 90.1 per cent. It currently has 36.2 per cent. As part of the deal, it will acquire 100 per cent of the share capital of TP North Slope Development for a sum of S$38.58 million to be satisfied by the issuance of 308.6 million new shares for S$0.125.

It will also acquire 96.33 per cent of the membership interest of Mustang Operations Center 1 (MOC 1) and 100 per cent of the membership interest in Mustang Road from the Alaska Industrial Development and Export Authority for a sum of US$64 million, or approximately S$88.13 million.

It will also acquire 3.67 per cent of the membership interest in MOC 1 from CES Oil Services for US$9 million, or S$12.39 million.

In addition, it will issue 40.65 million non-transferable share options, with each option carrying the right to subscribe for one new share at the exercise price of S$0.20 to the Alaska Industrial Development and Export Authority.

There are also 65 million freely-transferrable share options to TP North Slope Development vendors at an aggregate consideration of S$1.00, with each option carrying the right to subscribe for one new share in the capital of the company at the exercise price of S$0.09 per option.

About 20 per cent of the placement proceeds will be used for general working capital while the rest will be used for acquisition and development of oil and gas assets, said Alpha Energy.

The group estimated that assuming the placement was completed on Jan1, 2017 with all the placement shares being in issue during the period, the net loss per share of the group will decrease from US$0.09 to US$0.08.

If it is completed on Dec 31, 2017, the net asset value per share of the group after adjusting for the placement shares and the net proceeds will decrease from US$0.156 to US$0.138.

Alpha Energy has requested to resume trading of its shares on Monday, 9am. It had called for an immediate, voluntary suspension of trading in its shares on Sept 27.