Evolution Petroleum slides on equity raise to fund acquisition in Permian
EPM•Shares fall after follow-on offering is priced
Independent energy company Evolution Petroleum's EPM.A shares were down 11.5% at $3.39 in premarket trading on Wednesday after the acquisition-related follow-on offering was priced.
Houston, Texas-based Evolution Petroleum said it was announcing 3.7 million shares at $3.25 each for about $12 million in gross proceeds.
The offering price is a 15.1% discount to the stock's last sale on Tuesday.
Proceeds to help fund Permian Basin purchase and debt repayment
The company said it intends to use net offering proceeds to fund a $16 million purchase of oil and natural gas mineral and royalty interests located in the Permian Basin, and for general corporate purposes, including repayment of debt under its credit facility.
Roth Capital is sole bookrunner.
Evolution Petroleum has about 35.9 million shares outstanding.
Through Tuesday, the stock was up 8% year to date.
Two analysts rate the stock "buy" and two rate it "hold"; the median price target is $4.75, according to LSEG data.
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