CHK Oil Limited has signed a placing agreement with Patrons Securities and SBI China Capital Financial Services to issue up to 86.87 million new shares at HK$0.21 each under its June 2025 general mandate.
Key transaction terms • Size and dilution: The new shares equal 9.08% of current issued share capital and 8.33% post-placement, expanding total shares outstanding to about 1.04 billion. • Pricing: The HK$0.21 placement price is 17.6% below the 23 June 2026 closing price of HK$0.255 and 11.2% below the HK$0.236 five-day average. • Proceeds: Gross proceeds are expected at HK$18.24 million; net proceeds, after a 4.0% placing commission and other fees, are estimated at HK$17.32 million, implying a net issue price of HK$0.199 per share.
Intended use of funds • HK$9.60 million (55.4%) – partial repayment of the HK$13.97 million outstanding loan from controlling shareholder Xin Hua Petroleum (Hong Kong) Limited by 21 July 2026. • HK$6.50 million (37.5%) – pursuit of overseas investment or acquisition opportunities aligned with core oil and gas operations by 31 May 2027. • HK$1.22 million (7.1%) – general working capital and business operations by 31 December 2026.
Impact on ownership • Xin Hua’s stake will fall from 57.74% to 52.93%. • Public float will rise from 41.25% to 46.14%, including the new placees (8.33%).
Context The placement follows a first tranche completed on 18 June 2026, when 87.00 million shares were sold at the same HK$0.21 price, generating HK$17.35 million in net proceeds. Approximately HK$13.00 million of those funds have already been applied to reduce the Xin Hua loan, and HK$2.46 million has supported working capital, leaving HK$1.89 million unspent.
Conditions and timeline Completion is contingent on Hong Kong Stock Exchange listing approval and customary closing conditions. Settlement is scheduled within five business days after all conditions are met, but no later than 3 July 2026. The placing agents can terminate the deal under specified adverse market or company-specific events.
Strategic rationale Management views the equity raise as a swift, cost-efficient method to strengthen the balance sheet, lower gearing through debt repayment, and fund potential synergistic acquisitions, while broadening the shareholder base and enhancing share liquidity.
Shareholders and investors are advised that the placement remains conditional and may not proceed.
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