PERTH (miningweekly.com) – ASX-listed Australis Oil & Gas will raise A$39-million through a share placement to start drilling at its Tuscaloosa Marine Shale (TMS) project, in the US.
The company on Thursday said that it had received commitments from institutional and sophisticated investors for the placement of 115.28-million new shares, at an issue price of 34c each, to raise more than A$39-million.
The issue price represented a 5.6% discount to Australis’ last closing price on March 16.
“We are appreciative of the very strong support from our existing institutional holders, many of whom have loyally backed our strategy over the past three years,” said Australis chairperson Jon Stewart.
“We continue to execute our business strategy and this capital raising significantly strengthens our balance sheet, which in turn will aid our efforts to secure third party debt funding on better terms.”
Stewart said that the company also continued to evaluate various debt financing alternatives to supplement these equity funds.
“This new funding provides the initial capital to commence our TMS drilling campaign. Our aim is to repeat the 2014 productivity results achieved within the core of the TMS, with the application of the subsequent industry wide drilling and completion learnings.”
Australis holds over 95 000 net acres in the oil rich TMS core, making it the largest producer and acreage holder in that region. Australis operates 31 producing wells generating positive cash flow.