NEW YORK and LONDON, Oct. 25, 2006 (PRIMEZONE) -- Madagascar Oil Ltd, a privately held exploration and production company holding the largest current onshore exploration and development rights in Madagascar, announced that it has completed a US$25 million private placement of 10 million common voting shares at a share price of US$2.50. In connection with the transaction, the company also issued 5 million warrants to purchase shares at $2.50 per share and 5 million warrants to purchase shares at $1.65 per share.
The newly issued shares were sold to a U.S.-managed institutional investor. Jefferies & Company, Inc. acted as placement agent for the company in the offering.
Proceeds from the placement will be used in the operation of the ongoing steam injection pilot project to evaluate the development of the company's interests in the large, heavy oil Tsimiroro field, the multi-billion barrel bitumen Bemolanga oil sands mining project and for exploration activities in some of the company's other blocks, according to Alex Archila, Chief Executive Officer of Madagascar Oil.
"This successful capital-raising, together with the US$60 million private placement to institutional investors completed in March, ensures that Madagascar Oil has in place the financial resources to continue to move forward with its exploration and development efforts," said Mr. Archila. "The company will continue to explore additional financing options going forward."
About Madagascar Oil
Madagascar Oil Ltd is an oil and gas exploration and production company focusing on the development of onshore heavy oil fields and exploration of onshore conventional oil and gas prospects in Madagascar. Through its subsidiaries, Madagascar Oil SA and Majunga Oil SARL, Madagascar Oil holds production sharing contracts for oil and gas exploration and development on six onshore blocks covering nearly 53,000 square kilometers (20,500 sq mi) in Madagascar, including a heavy oil field at Tsimiroro and an ultra heavy oil field at Bemolanga. Madagascar Oil and its management team are committed to supporting the country of Madagascar's efforts to develop its oil and gas resources in an efficient and environmentally sensitive manner and to contributing actively to the social and economic advancement of the island nation.