Range Resources has surprised the market by securing $US12 million in funding from a Hong Kong-based investor at a premium to its trading price.
Abraham Ltd will take a 15 per cent stake in the oil and gas explorer by subscribing for 712 million new shares at ï¿½0.01.
The price equates to 1.78 Australian cents, a 49 per cent premium to the company's last traded price yesterday.
The placement will be completed in two tranches with the second subject to shareholder approval.
"The funds will be used to repay existing debt, including convertible instruments that have diluted the company's equity over recent months," Range said in a statement.
"As announced on April 30, the company's total debt at that date was approximately $US10.5 million.
"The remainder of proceeds of the subscription will be used for general working capital of the company."
Range Resources chief executive Rory Scott Russell said the strategic investor is subscribing for shares at a significant premium to the market price which demonstrated their confidence in the new management team, the underlying quality of our assets and the newly focused strategy at Range.
The US$12 million subscription will allow us to refinance the expensive and dilutionary corporate debt and provide working capital as we now move forward with Range's operational and long term financing objectives, particularly in Trinidad."
Range has oil and gas interests in Trinidad, Puntland, Somalia, the Republic of Georgia, Guatemala, Texas and Columbia.
Shares in the company were up 0.2 cents, or 18.18 per cent, to 1.3 cents at 11.20am after touching a peak of 1.5 cents in earlier trade.