PERTH (miningweekly.com) – Oil and gas major Santos has successfully completed the institutional placement component of it’s A$1.5-billion capital raise.

Some 256-million new shares, priced at $4.06 a share, will be issued under the institutional placement, raising A$1.04-billion.

“The equity raising was significantly over-subscribed with strong demand from existing shareholders and high quality new investors. Santos is now positioned to deliver a low-cost, reliable and high performance business with financial flexibility, to build and grow the business in a low oil price environment,” said Santos MD and CEO Kevin Gallagher.

Settlement of the new shares will take place on December 20, and the issue and quotation of the new shares will take place on December 21.

Santos is also planning a share purchase plan (SPP) to raise up to A$500-million.

Eligible shareholders will be allowed to subscribe for up to A$15 000 in new shares, subject to scale back, without incurring brokerage or transaction costs.

The issue price under the SPP will be the lesser of the issue price under the institutional placement, or the volume weighted average price of fully paid ordinary shares over five-days trading up to, and including the last day of the SPP offer, less a 2% discount.

The proceeds from the capital raising will be used to strengthen the company’s balance sheet and provide Santos with financial flexibility to take advantage of growth opportunities aligned with its core business, and new strategic plan.

Santos has previously revealed a three-phased strategy to drive shareholder value, including simplifying its business to focus on five core, long-life natural gas assets, progressing growth opportunities across higher margin conventional assets, and developing focused exploration strategies and capabilities, and to identify additional gas supply to drive long-term value from its natural gas assets.