XCD raising funds for North Slope project

Kay Cashman

Petroleum News

XCD Energy Ltd. emerged from a trading halt Oct. 23 to say it has commitments to raise $2 million through a dual tranche placement on the Australian stock exchange, the proceeds of which will be used to advance its onshore Peregrine project in the National Petroleum Reserve-Alaska.

“Tranche” is a French word meaning portion. In the investment world, it is used to describe a security that can be split into smaller pieces and sold to investors.

In this case Tranche 1 uses XCD’s existing shareholders to raise approximately $500,000 through the issue of 48 million shares at 1 cent per share with 24 million free attaching options - one free option for every two paid shares, exercisable at 2 cents per option with a three-year expiration.

Under the same terms, Tranche 2 seeks to raise approximately $1.5 million through the issue of up to 152 million shares at 1 cent per share.

The second tranche placement will be around Nov. 29, pending stockholder approval.

XCD told Small Caps it expects to have approximately $3.2 million in cash following completion of Tranche 2.

The money will mainly be used to advance XCD’s 149,590-acre Peregrine project and kick-off its farm-out campaign at the end of the year on the acreage.

XCD managing director Dougal Ferguson told Small Caps the funds may help advance a “low-cost drilling opportunity at Project Peregrine that, if successful, could result in the timeframe to drilling being significantly reduced.”

XCD is “investigating the option of using innovative drilling options that would not only be significantly cheaper than traditional methods but could result in the drilling being done much quicker than the market is currently expecting,” Ferguson said.

“This may actually allow us to drill, potentially, during next northern summer, which is July to September next year.”

“There are still a few hurdles but it’s something that … could add a lot of value.”

- KAY CASHMAN