Canadian oil and gas company Sabretooth Energy Ltd said a group of individuals under the name Cequence Team will invest C$9.44 million ($8.38 million) in the company as part of its recapitalization plan.
Under the plan, Cequence will buy about 25.5 million common shares of Sabretooth at an estimated price of 37 Canadian cents each, representing a discount of 16 percent to May 22 closing price of Sabretooth.
The Cequence Team is primarily comprised of individuals who were formerly with public energy companies including Cyries Energy, Cequel Energy and Cypress Energy, Sabretooth said in a news release.
Sabretooth said will also acquire a private oil and gas company by issuing about 1.5 million shares at 37 Canadian cents a share. The assets of the private company currently include about C$400,000 of cash and undeveloped land of C$150,000, Sabretooth said.
Upon completion of the recapitalization transaction, Sabretooth will be renamed as Cequence Energy Ltd and Howard Crone will assume the role of President and Chief Executive Officer. The company is expected to produce 1,560 barrel of oil equivalent per day.
Sabretooth shares closed at 43 Canadian cents Friday on the Toronto Stock Exchange. ($1=1.127 Canadian Dollar)
(Reporting by R. Manikandan in Bangalore, Editing by Dinesh Nair)