Why the Invictus Energy (ASX:IVZ) share price is climbing 7% today

The Invictus Energy Ltd (ASX: IVZ) share price is climbing after the company announced that it has completed a share placement.

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The Invictus Energy Ltd (ASX: IVZ) share price is climbing in late morning trade. This comes as the company announced that it has completed a share placement. At the time of writing, the energy producer’s shares are up 7.1% to 15 cents.

Let’s take a closer look and see what Invictus Energy updated the ASX market with.

Completed placement

The Invictus Energy share price is racing higher following a successful capital raise.

According to its release, Invictus Energy advised it has received firm commitments to raise $8 million through a private placement. The offer was presented to new and existing institutional and sophisticated investors.

Under the placement, Invictus Energy will issue 25,058,198 fully-paid ordinary shares under listing rule 7.1. This allows up to 15% of its shares to be issued without shareholder approval.

Furthermore, another 47,669,075 new shares will be allocated to eligible investors under an additional listing rule 7.1A placement capacity.

In total, 72,727,273 ordinary shares will be allotted at an issue price of 11 cents per new share. Thus, this offer represents a discount of 10% on the 15-day volume-weighted average price (VWAP).

Attached to the shares will be an unlisted option of a 1-for-2 basis, with an exercise price of 17 cents. The options will have a 3-year expiry date. A maximum of 36,363,636 new options is to be issued.

Furthermore, proceeds of the placement will be used towards a number of strategic initiatives. This includes commencing the company’s 2D seismic campaign in the Mzarabani Prospect, as well as general working capital.

Management commentary

Invictus Energy managing director Scott Macmillan commented:

We are extremely pleased with the excellent support received from new and existing shareholders and it is a strong endorsement of our Cabora Bassa project and the exciting and world class Mzarabani-1 Prospect which the Company is preparing to drill.

The Company will also use part of the proceeds from the placement to order long lead drilling equipment and undertake a rig tender exercise. In addition, the placement will provide ongoing working capital to support the development of the project as it continues to prepare for a high impact basin opening drilling campaign, anticipated in late CY21/early CY22.

About the Invictus Energy share price

The Invictus Energy share price has gained an astonishing 1,350% in the past year. It has also gained over 160% year-to-date. The company’s shares are within sights of reaching its multi-year high of 15.7 cents achieved late last week.

Invictus Energy has a market capitalisation of roughly $69 million, with around 477.4 million shares on issue.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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