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CGX Energy Down 12% on Dilution Concerns from 114M-Share Bought-Deal Offering

CGX Energy Inc. (OYL.V) is now off more than 12% today, falling on likely dilution concerns after late yesterday announcing an $80 million bought-deal financing to fund offshore exploration and drilling near Guyana.

The company will issue at least 114.3 million shares of common stock priced at 70 cents each, with underwriters eligible to sell another 17.1 million shares within the next 30 days to cover possible overallotments. Prior to the offering, CGX had just under 195 million shares outstanding; the new offering, if fully subscribed, including overallotments, would dilute existing shareholders by as much 68%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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