Canadian Overseas Petroleum Ltd on Friday said it intends to raise GBP3 million through a share placing to finance its Nigerian development project.

The oil & gas company said it will issue 895.5 million shares at a price of 0.34 pence each. The stock was trading 24% lower on the day Friday at 0.37p per share.

As at the end of June, the company said it had USD1.7 million in cash. It also said that the proceeds from fundraising will go towards the company’s on-going general and administrative expenses.

This principally covers a full technical team, Canadian Overseas Petroleum said, including geologists, a geophysicist, reservoir engineers, a drilling engineer and in-house counsel, which cost about USD400,000 per month to progress its projects in West Africa.

The company said it is continuing to progress the financing of its Nigerian development project and is responsible to cover the costs of the near term work programme, including drilling one well under Phase One of the OPL 226 production sharing contract, offshore Nigeria.

“In strengthening our balance sheet, we are able to continue to focus on securing a financing package for the highly prospective OPL 226 project,” said President & Chief Executive Arthur Millholland.