Contact Exploration said that it has been advised by Pieridae Energy Limited that it has closed a non-brokered private placement of common shares pursuant to which it raised aggregate gross proceeds of $22.2 million at a price of $9 per share.
Pieridae partnered with Contact to secure natural gas supply opportunities for Pieridae’s planned LNG terminal in Goldboro, Nova Scotia. Pieridae has previously announced that it has secured E.ON, Europe’s largest utility, as a major offtake partner for the terminal and has also secured the required environmental permits to advance the Goldboro LNG project.
As a result of the Financing, Contact has increased the carrying value of its investment in Pieridae to $15,024,708, up from the previous carrying value of $1,669,412. Contact has an ongoing option to participate in Pieridae’s equity financings, however, the company elected to not participate in the Financing. As a result, Contact’s equity ownership in Pieridae has decreased from 13.51% to 11.45%.
As announced by the company on March 4, 2013, Pieridae and Contact formed Pieridae Production Limited Partnership to source, develop and produce natural gas to serve as a significant portion of the feedstock for Pieridae’s Goldboro LNG terminal. To date, Pieridae has not confirmed whether the use of proceeds from the Financing will include funding the drilling of the first two natural gas exploration wells proposed for PPLP’s New Brunswick properties.
Press Release, September 3, 2014; Image: Pieridae Energy