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White Nile raises £7m (II)

White Nile, the oil minnow half-owned by south Sudan's government-in-waiting, yesterday raised £7m at 100p a share, 10 times the price at which the company floated in February.

The placing price confirmed White Nile's status as one of the most intriguing stock market stories of the year.

Despite widespread predictions that the share price would crash after its initial storming performance, White Nile has managed to stay above 100p, helped by the near-universal refusal of its main backers to sell any of their investment. Yesterday the price rose 4.5p to 119p.

Existing shareholders, led by the highly regarded resources investor Artemis and hedge fund RAB Capital, provided the backbone of yesterday's placing. White Nile said some new institutional investors also bought shares but did not name them.

The cash will be used to fund exploration in the group's 65,000 sq km oil licence area in south Sudan. It has commissioned Canadian contractor Terra Seis to conduct a seismic evaluation of the block, which according to one study contains 5bn barrels of oil.

White Nile's economic interest in the block is 60%, which it in effect bought earlier this month by issuing 155m shares - a 50% stake - to the prospective south Sudanese government. The former rebel movement plans to use the shares as collateral to raise loans to develop the region after 21 years of civil war. However, French oil group Total disputes White Nile's claim to the acreage.

The £7m raised yesterday adds to the £9m raised through the flotation.

Phil Edmonds, the former England cricketer who is White Nile's chairman, said the group now has a "healthy cash position" to pursue its exploration objectives.

"It also underlines the support we have from our existing investors and other leading financial institutions," he said.

Central African Mining & Exploration, another Aim-listed company backed by Mr Edmonds and a substantial investor in White Nile, subscribed for £200,000 of shares in the private placing.