LONDON: LMS Capital has approved a further investment of $5.3 million (£3.9 million) in Dacian Petroleum, a Romanian onshore oil and gas company, following a shareholder vote in May supporting a managed realisation strategy.
The decision comes after months of underperformance at Dacian, driven by missed production targets and a softening oil price environment. LMS, which first invested in Dacian in 2020, said the new funding would support operational improvements and unlock value for shareholders.
The LMS Board cited a detailed 12-month turnaround plan developed by Dacian’s restructured leadership team, including maintenance upgrades, well interventions, asset monetisation, and cost efficiencies. The plan also includes evaluating new development projects and clean energy initiatives.
John Burkhart joined Dacian’s board earlier this year as a Non-Executive Director, while Blaine Saathoff, an experienced operational executive, is now supporting the team part-time and will join the board shortly.
The new loan will carry a 14.25% annual return and grant LMS 204,533 shares in Dacian, representing 55.8% of the company’s enlarged capital. Combined with shares from a prior bridge loan, LMS will hold 67.4% of Dacian’s equity once regulatory approvals are secured.
The bridge loan, extended beyond its original June maturity, was backed by LMS directors and other investors, offering a 14% annual return and 87,063 shares in Dacian.
LMS said the expected returns from the new investment outweigh the risks of an immediate sale, citing improved governance, execution speed, and market feedback. The company also noted a $2.3 million reduction in Dacian’s net asset value as of March 31, reflecting the impact of the new financing.
Additional non-related party investors may contribute up to $300,000 to the new loan, LMS confirmed.