Canadian firm Zenith Energy has revealed plans to raise £265,000 through a share placing.
Zenith, which is listed in London and Toronto, will issue 3.5million shares at 7.5p each.
The company, which operates the largest onshore oilfield in Azerbaijan, said the cash would help pay for a new workover rig manufactured in China.
The rig will also be capable of carrying out well completion, Zenith said.
Zenith chief executive Andrea Cattaneo said: “We previously stated our intention to acquire a more powerful, modern workover rig. The proceeds of the placement will enable the company to pay the required deposit for this acquisition without depleting our cash reserves.
“The remaining proceeds of the placement will be allocated towards our field rehabilitation and development programme in Azerbaijan.
“The purchase of this workover rig will give Zenith significantly greater flexibility and capabilities in its field rehabilitation activities. It will also decrease our reliance on costly external oil service companies and thereby reduce operational expenditure.
“This type of rig will also have the added capability of carrying out well completion and the rig will therefore be particularly valuable when we begin drilling activities in 2018.
“I look forward to announcing the closing of this acquisition in due course.”
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