Mogul closed the sale of its 20% East Wadi Araba (Egypt) interest to Sea Dragon on April 24, 2008, which resolves the open question about what happens to that stake after the abandoned 2007 merger. In return, Sea Dragon takes over Mogul's outstanding drill-program liabilities (Mogul estimates at least US$650,000), pays US$100,000 cash, and gives Mogul 4,000,000 Sea Dragon shares, 90% of which are held in escrow until Sea Dragon drills an exploratory well on the concession and announces the results. The filing says Parvez Tyab, Mogul's largest shareholder and brother of President Naeem Tyab, is an officer and director of Sea Dragon, and that Mogul expects to seek shareholder approval of the agreement. Treasurer Mohammad Khan resigned effective April 25, 2008, and Mogul plans new Canadian private placements of about $1.9 million at $0.25 (flow-through) and $0.20 per share, expected to complete before May 31, 2008.
15 Feb 2008capital raising announcement● NeutralMajor
Mogul reported completing part of the financing it announced in November 2007. It raised $804,984 by selling 4,472,134 flow-through shares at $0.18 and $364,950 by selling 2,433,000 shares at $0.15, a total of about $1.17 million against the roughly $3 million target. Sales commissions are 8% cash plus warrants for 10% of the shares sold, and the money is meant for exploration and development on its Saskatchewan leases. Mogul intends to keep raising money in 2008, and the new shares add to the share count.
What it means for a shareholder
2.4m new shares at US$0.150 to raise about US$364,950. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
Mogul and Sea Dragon agreed not to go ahead with the business combination from the July 2007 Letter of Intent, which would have raised Mogul's East Wadi Araba interest from 20% to 60%. Mogul says it will instead focus on its 100%-owned Saskatchewan leases (68 leases, about 9,300 acres) and plans a winter drill program. It also plans two private placements to Canadian investors (one flow-through, one not) to raise about $3 million, and intends to seek a TSX Venture Exchange cross-listing, subject to approval.
Mogul signed a Letter of Intent dated July 30, 2007 for a proposed business combination with Sea Dragon Energy, Inc., a private Canadian company that holds a 40% working interest in the East Wadi Araba concession (Mogul has 20%). Sea Dragon holders would receive up to 40,497,500 Mogul shares, about one for each Sea Dragon share, against Mogul's 38,561,810 shares now outstanding, so existing holders would be diluted. The letter targets a definitive agreement by September 1, 2007 and a closing by September 10, 2007, and it sets out an expected board and officer slate and planned option grants. It is a proposal that depends on a definitive agreement, approvals and other conditions.
Mogul said the operator, Dover Investments Ltd., told it that drilling has started (spudded) on the EWA 4X well at the East Wadi Araba Concession in the Gulf of Suez, Egypt, where Mogul holds a 20 percent working interest. The well is deviated, drilled from an onshore location to test an offshore structure for light oil in the Raha and Nubia formations; no results are given, and Mogul says it will provide updates as drilling progresses.
