ZaZa Energy Corp. closed a definitive agreement with an institutional investor for $2.5 million in cash proceeds, the company said April 30.

Proceeds will support drilling and development of ZaZa’s Buda-Rose “stack and frack” wells, support workovers on other wells and support working capital.

Under the agreement, ZaZa issued shares of Series A 5% convertible preferred stock in a private placement.

Stockholders can convert the stocks into 2.5 million common shares, subject to customary protections.

Warrants to purchase about 1.8 million common shares exercisable at $2.25 each are also part of the agreement. Each warrant is exercisable into one common share for five years, beginning six months after the transaction closes, ZaZa said.

Registration statements covering the common shares’ resale will be filed with the Securities and Exchange Commission.

Northland Capital Markets is the placement agent.

Houston-based ZaZa Energy Corp. explores and produces domestic unconventional oil and natural gas.