Earlier last month Rowbottam was heralding a $4.5 million funding deal with controversial New York-headquartered investment firm Magna Equities as being a non-dilutionary funding deal that was good for shareholders, giving WHL optionality to finalise a bid he was making on a near-term African production opportunity.

He did not sound like a managing director planning to walk out the door less than three weeks later.

The company had almost $4 million in the bank at the end of the past quarter and was planning to expand its holdings.

But it appears there was a debt bomb ticking in the background.

Now it appears the last minute deal with Energy Capital Partners proposal is the only one that can be executed within the timeframe demanded by the company's third party debt providers.

The proposal is heavily dilutive to shareholders, but allows the company to recapitalise and cut costs, WHL said.

The recapitalisation proposal comprises the issue of $2 million worth of convertible notes secured over the company's assets - the Seychelles acreage and the La Bella project in Victoria - converting into ordinary fully paid shares valued at $0.001.

In return for the cash injection ECP or a third party will gain 2 billion shares in WHL, blowing out the company's paper from a modest 171 million shares dramatically.

In return for organising the funding ECP will gain 20 million shares valued at of $0.00001 and will pay $350 for 350 million options with an exercise price of $0.004 each, expiring three years after the date of issue, and it will be paid a fee of 15% of the amount raised via the convertible notes.

When WHL suspended its shares on May 27 they were trading at $0.03 per share, valuing the company at $5 million.

The funds raised from ECP or its associates will be used to play all third party debt plus any fees owned to ECP.

In March WHL's audited accounts indicated the company would be capable of paying down any debt it had.

As part of the ECP changes, Rowbottam has agreed to depart the company effective May 31, and Stuart Brown will move into the chairman's role, swapping jobs with Faldi Ismail, who will move into a non-executive capacity.

Building industry executive Graham Durtanovich will also be appointed to the board, possibly heralding a move into the tech sector.

"The oil and gas industry continues to face significant challenges during the current commodity price downturn, particularly for junior explorers," Brown explained.

"The cost of servicing ongoing debt facilities is no longer a sustainable option and this recapitalisation, along with continuing cost reduction initiatives, provides the opportunity to conserve valuable cash and realise value from existing assets while seeking new growth and revenue generating opportunities.

"In addition to the proceeds from the convertible notes, it is also planned that all existing shareholders will be offered an opportunity to participate via a rights entitlement issue, following the upcoming shareholder meeting.

"The board believes in the underlying value of the company's assets and that this recapitalisation represents the company's best option to deliver value to shareholders in the medium to longer term."

ECP needs to raise the funds for the first $1 million worth of notes by tomorrow afternoon.

The funds will be used to sever ties with Magna and repay its loans.

If shareholders do not approve the deal by July 31, WHL will be required to pay ECP $400,000 in cash, assuming it has secured at least $100,000 in financing.

Energy News has sought comment form the WHL board and Rowbottam, however the company said they were all travelling this week.