Magellan Petroleum Corp. announced Monday that a New York private equity firm has invested $23.5 million in the Denver-based oil and gas company.
Magellan said that it intends to use the proceeds of the transaction, in addition to the company’s $15 million in cash and equivalents, to fund the $10 to $20 million necessary for the drilling, completion, and execution of a CO2 enhanced oil recovery pilot project and to further establish the value of its United Kingdom acreage through the participation in one or more exploratory wells in 2014.
Magellan said the investment will give the investor, New York-based One Stone Holdings II LP, 19.2 million shares of Series A Convertible Preferred Stock.
“This transaction is a critical milestone in the path to delivering value to our shareholders,” said J. Thomas Wilson, president and CEO of Magellan.
“The proceeds from this transaction are expected to place the company on a sound financial footing with sufficient liquid resources to progress development of the company’s assets over the next two years,” Wilson added.
One Stone focuses on investments in the oil and gas industry.
Bob Israel, managing member of One Stone, said One Stone’s focus is on “identifying ‘underdeveloped assets’ in the natural resource sector. We believe the asset portfolio held by Magellan is an excellent opportunity to combine One Stone’s capital with high potential, underdeveloped assets.”
Howard Pankratz: 303-954-1939, hpankratz@denverpost.com or twitter.com/howardpankratz
