LONDON (ShareCast) - (Sharecast News) - Oil and gas development company Empyrean Energy announced on Friday that it was no longer proceeding with its proposed ?1m placing.
The AIM-traded firm had raised ?0.41m on 14 April via a direct subscription by a number of existing investors and directors at a price of 3.5p per share.

At the time, it also announced a proposed placing to raise up to a further ?1m.

On Friday it said that, due to continued volatility in global commodities markets and the effect of a further decline in the price of oil in recent days, it had chosen not to proceed with the placing for now.

However, it said it had received indications of interest from a number of potential investors, and now planned to launch an open offer to enable all qualifying existing shareholders to subscribe for shares in the company at the issue price.

As it previously said, Empyrean was expecting the net proceeds of the subscription to be sufficient to satisfy its share of final costs in relation to the recent drilling in the fourth quarter, including post-drilling resource updates, and to provide sufficient working capital through to the end of May.

It said the net proceeds of the open offer would provide it with additional working capital, and ensure greater financial flexibility as it seeked to capitalise on and realise a portion of the "significant value" created in its diverse asset base.

Empyrean said it also had access to financing for its ongoing working capital requirements through the ?10m equity placement facility entered into with Long State Investments on 24 December.

"Whilst the decision has been made not to proceed with the proposed placing at this time, a number of existing shareholders indicated that they would like to have the opportunity to participate and the company plans to accommodate all shareholders through an open offer and to continue to work with potential new investors," said chief executive officer Tom Kelly.

At 1446 BST, shares in Empyrean Energy were down 9.46% at 3.35p.

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