AIM quoted Oil explorer Dominion Petroleum is planning a $50m (£33m) share placing to help fund new Ugandan drilling projects, sources confirmed to City A.M.
While wary of diluting its shares, Dominion is thought to prefer the option to selling stakes in its prospects to larger rivals, which could hamper its future growth. Canaccord Adams and Mirabaud Securities will act as joint bookrunners.
The company is hoping to drill in the Albertine Rift area of Uganda, an area also developed by Tullow Oil, where there is thought to be in excess of 2bn barrels of untapped oil.
The drilling campaign will attract investors hoping Dominion will replicate the success of Tullow, whose fortunes were transformed when it struck black gold in the region. It could also catapult Uganda into the list of richest African nations.
As well as expanding its Ugandan operations, Dominion also plans to conduct tests in Tanzania.
Dominion last month sold stakes in two Tanzanian exploration blocks to France’s Maurel & Prom.