April 27, 2010 (FinancialWire) — Grid Petroleum Corp. (OTCBB: GRPR) said it has executed a $5 million equity financing agreement with a European institutional investor.

The company said that the initial agreement is for an initial sum of $5 million with the provision to increase this amount further, if necessary.

According to Grid, the terms of the agreement are for up to USD $5 million to be drawn from the investor in exchange for equity in the company. Equity is priced at the higher of either $0.75, or 90% of the volume weighted average of the closing price of the firm’s common stock, for the five banking days immediately preceding the date of the notice requesting funds.

Each share issuance is accompanied by a purchase warrant on a one for one basis. Each warrant will entitle the subscriber to purchase one additional share of common stock, at an exercise price equal to 150% of the unit price at which the unit containing the warrant being exercised was issued, for a period of two years from the date such Warrant is issued.

The inclusion of a floor price in the financing, and the lack of floorless warrants is hoped to ensure stability in the price of the stock, according to Grid. There is also an option of a further USD $2.5 million should both parties wish to proceed, enabling Grid to draw a potential total of USD $7.5 million.

Grid said that the deal comes at a time when the firm has acquired close to four thousand acres of oil and gas properties in the Jonah Field region of Wyoming. As a ‘draw down’ agreement, the equity financing allows Grid to draw on this money as and when required by its Jonah Field exploration, eliminating debt.

UK-based Grid Petroleum is an independent oil and gas exploration company, with an operational office in Denver Colorado. Grid has recently secured assets in Wyoming, neighboring the prolific Jonah Gas Field.

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