Raising less money than hoped for from a recent private equity placement is no big deal, says the chairman of a company exploring for onshore oil and gas in Nova Scotia.
Forent Energy Ltd. of Calgary wanted to raise $1.5 million, primarily from Nova Scotia investors, through a combination of flow through shares and units made up of common shares and warrants.
Instead the company, which has just started drilling a well six kilometres northeast of Stew-iacke, announced Wednesday that it raised just $400,000 in its latest financing.
Roughly $108,000 came from Brett Wilson, a risk-taking Calgary entrepreneur, who is also Forent’s chairman. That gives him 22 million Forent shares, leaving Wilson with a 15.6 per cent stake in the company. (The widow of Forent founder Dennis Forgeron owns 30.6-million shares or 22.6 per cent, making her the largest single shareholder.)
“We were issuing new equity and I didn’t want any dilution of my stake to take place,” Wilson said of his participation in the equity issue.
Wilson, one of the original hosts of The Dragons’ Den, holds “several hundred” investments directly or through his holding company Prairie Merchant Corp. He was a major shareholder in Halifax-based Overland Realty Ltd. Wilson also has a stake in the7 Virtues Beauty Inc., also based in Halifax.
Wilson said he is unfazed by the less-than-enthusiastic response to the private placement by the well-heeled Nova Scotia investors he and other Forent executives made a pitch to during a recent visit.
“How many guys have come through Nova Scotia saying, ‘We’re going to drill for oil onshore and we need to raise money?’ Not many,” Wilson said. “The fact that they didn’t invest at time zero means nothing for me. There’s no disappointment. This is about building a relationship down there.”
Wilson said Forent has plenty of working capital to complete its two planned exploratory wells in Colchester County. The Calgary-based company broke ground Tuesday on the first well. The company is hoping to find hydrocarbons in the reef-like structures its geologists think lay underground there.
“If we drill two wells and there’s nothing then the geological and geophysical information needs to be rethought,” Wilson said.
In December, Forent raised $2.4-million through a private flow through share placement.
The company’s shares were trading at around 13 cents each late Wednesday on the TSX Venture exchange.
