NuEnergy Gas (ASX:NGY) should trade higher after signing a binding Investment Agreement with New Century Energy Resources to recapitalise, and fund development of its Indonesian Production Sharing Contracts.
New Century has extensive experience in the Coal Bed Methane Exploration and Production industry, including completion and production techniques that can enhance the productivity of coal bed methane wells.
Within three business days New Century will pay a deposit of $200,000 to obtain exclusivity and commence due diligence for 30 days, and subject to successful completion of the due diligence will subscribe for circa 83 million NGY shares at $0.03 to raise $2.5 million.
This would represent 19.9% of the expanded share capital.
Subsequent to the placement, Graeme Robertson will resign as Non-Executive Chairman and remain as a non-executive director of NuEnergy.
New Century will appoint three directors to replace the remaining three directors, and subject to completion of the share placement, subscribe for a total minimum commitment of $10 million to be completed by 31 December 2014 at a minimum price of $0.03 per NGY share.
This is a significant development for NGY which was yesterday trading at $0.013 with a market cap of around $4 million.
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