Kazakh oil firm Tethys Petroleum (TPL) is up 2.9% to 5.4p despite its larger peer Nostrum Oil & Gas (NOG) - itself up 0.6% to 535p - walking away from a mooted takeover.
Nostrum had agreed a deal with Tethys last month (23 Sep) which included $20 million of interim funding but the latter’s largest shareholder Pope Asset Management has spiked the agreement. Before the Nostrum deal emerged, a strategic partnership and funding deal from AGR Energy was on the table.
And, in a separate statement this morning, Tethys told investors that it has received a letter of intent from AGR regarding a potential $20 million equity fundraise, as well as a $5million loan to support short-term liquidity.
This arrangement would also give AGR the option to buy a further $20 million of new shares. Writing before the second bit of news Cantor Fitzgerald said it would keep its price target and recommendation under review, commenting: ‘We continue to highlight that in a challenging oil price environment globally, and especially in Kazakhstan (where the selling price at the well head of oil fell to US$13/bbl), financial constraints will become more pronounced.
‘Whilst our forecasts do recognise increased revenue from higher gas prices and volumes (current production c.5,450boepd), and reduced G&A expenditure, we believe Tethys’ financial flexibility will come under increasing pressure in the absence of material funding.’
