Houston-based ERHC Energy Incorporated with oil and gas assets in sub-Saharan Africa, has commenced its previously announced rights offering to raise $45million for funding its accelerated oil exploration programmes in Africa.
ERHC Energy is a publicly traded American company with largely Nigerian ownership.
Shareholders of the company had earlier in the year voted in favour of the company's proposals that would enable fund-raising for oil and gas exploration in the company's highly prospective acreages in West Africa, including the Joint Development Zone (JDZ) owned by Nigeria and Sao Tome and Principe.
At a shareholders' meeting held in Houston on October 9, 2012 to consider the proposals, ERHC's management announced plans to raise up to $45 million for exploration work programmes.
Shareholders approved a proposal to amend ERHC's Restated Articles of Incorporation to increase the number of shares of common stock that the company is authorised to issue.
"We are very excited that our shareholders have given us the financial flexibility needed to move our current assets forward and seize new opportunities that align with our ambitious growth plans," said President and Chief Executive Officer of the company, Mr. Peter Ntephe.
Following this approval, ERHC distributed on a pro rata basis to the holders of its common stock one non-transferable subscription right for every three shares of common stock owned.
Each subscription right, with the total number of subscription rights issuable to a holder rounded down to avoid the issuance of fractional rights, entitles its holder to purchase one share of the company's common stock.
In addition, holders of subscription rights who fully exercise all of their subscription rights may also request to purchase additional shares of the company's common stock that remain unsubscribed at the expiration of the rights offering, subject to the availability and pro rata allocation of shares among rights holders exercising such over-subscription right.
The company will offer over 200million shares of its common stock in the rights offering, inclusive of the over-subscription privileges, representing approximately 33 percent of its current outstanding shares of common stock, if fully subscribed.
The company plans to apply capital raised in the rights offering to fund specific exploration and development activities pursuant to work programmes governing its exploration acreage in the Republics of Chad and Kenya, as well as for general corporate purposes and working capital needs.
RHC Energy Incorporated is a Houston-based independent oil and gas company focused on growth through high impact exploration in Africa and the development of undeveloped and marginal oil and gas fields.