While Nile raises £7m
INVESTORS in stock market star White Nile received a boost today as the company raised £7m to allow it to research reserves.
White Nile, which faces a dispute with French oil giant Total over its oil fields in Sudan, raised the money through a private placing. It will be used for exploration and working capital.
The fundraising follows the awarding of a contract to Canada's Terra Seis Geophysical to conduct a seismic evaluation programme of White Nile's 65,000 sq km oil licence area in South Sudan.
'This not only means that we have a healthy cash position to fulfil our exploration objectives, but also underlines the support we have from our existing investors and other leading financial institutions,' said chairman Phil Edmonds.
'The funds will be predominantly allocated towards our intensive exploration work programme aimed at establishing new discoveries of oil in South Sudan,' said Edmonds, a former England cricket player.
Dealing in the new shares is expected to start on 4 July, White Nile said.
White Nile claims to have title to Sudan's Ba oil reserves but that is disputed by Total.
The company's shares were suspended for a second time in May (at 141p). Officials at the junior Aim stock market took action after becoming worried at sharp movements in the shares.
The suspension came only four days after trading in White Nile recommenced for the first time since February when its shares shot up 13-fold in less than a week, propelling its value from £15m to £214m.
The frenzy of interest in White Nile since its flotation has been sparked by a deal with the new government of South Sudan to explore in an area close to the Kenyan border.
The shares have also been a target for legendary short-seller Simon Cawkwell. He has dismissed valuations of the firm as 'utterly absurd'. Cawkwell, also known as Evil Knievil, has sold short 300,000 shares in White Nile at prices ranging from 15p to 115p.
