Shares in AJ Lucas opened at $1.50 on Wednesday but by about midday dropped to $1.24. Shares continued to fall throughout the remainder of the day, hitting a low of $1.12 before rebounding slightly to close at $1.16.
The drilling and services provider decided to lift its eight month suspension after shareholders approved a recapitalisation plan late last week.
The plan includes raising about $51.3 million from an entitlement offer to shareholders and drawing down $70 million of the $86.5 million mezzanine loan provided by Kerogen to buy back redeemable convertible preference shares held by funds managed by Goldman Sachs.
In September, AJ Lucas completed a 15% placement to Kerogen to raise $13.4 million as part of its recapitalisation.
In an announcement last week, AJ Lucas executive chairman Allan Campbell said the recapitalisation would allow the company to invest in its business again, especially in drilling where the outlook was bright.
“Indeed, we expect to enter 2012 with a brighter outlook than at any point in the last three years,” he said.
“Our forward order books are stronger than they have ever been. The order backlog now exceeds $735 million across drilling and BCI [building, construction and infrastructure].”
In addition, Campbell said AJ Lucas’ energy portfolio had matured to a stage where the company could start examining how “best to crystallise some of the embedded value”.
Earlier this year Cuadrilla, which is 42% owned by AJ Lucas, announced it estimated the Bowland asset in the UK had 200 trillion cubic feet of gas in place.
“There are still hurdles to overcome to commercialise this prospect, but I am very excited about the potential of this world class asset,” Campbell said.