PERTH (miningweekly.com) – Oil and gas explorer Talon Energy is hoping to raise A$14-million through a share placement and share purchase plan (SPP) to fund its share of development capital for the Walyering gas project.

The company on Friday announced that it had received firm commitments from institutional and sophisticated investors for the placement of 82.7-million shares, at a price of 14.5c each, to raise an initial A$12-million.

The new shares will be issued under Talon’s existing placement capacity and will not require shareholder approval.

The issue price represented a 12.1% discount to Talon’s last closing price and a 14.9% discount to the company’s five-day volume weighted average price.

Additionally, Talon will undertake an SPP to raise a further A$2-million, giving eligible shareholders the opportunity to subscribe for up to A$30 000 of new shares in the company, also at a price of 14.5c each.

“Talon is pleased with the level of support received from new and existing shareholders for this placement. This is an important capital raising which will fully fund Talon’s share of Walyering’s development capital and operating costs, and provide additional capital to further invest in our high-quality exploration portfolio over the next couple of years,” said MD Colby Hauser on Friday.

“Walyering is expected to be Western Australia’s next onshore gas producer, and will be a low cost, low carbon intensity project that is well placed to meet Western Australia’s growing industrial gas demand.

“Although we undertook an extensive debt funding process and received credit-approved terms from providers, the board has decided to undertake an equity raise as it provides the greatest certainty to fund and accelerate upcoming exploration commitments and more importantly offers the flexibility to utilise cashflows and explore various ways to grow value for Talon shareholders.”

Talon holds a 45% non-operated interest in the Walyering project, with fellow listed Strike Energy holding the remaining share. Strike Energy this week announced plans to bring Walyering into production by 2025, along with three of its other gasfields. Walyering holds a 2P reserve of 542 PJ and 0.55-million barrels of condensate, and a 2C contingent resource of 31.9 PJ and 0.31-million barrels of condensate.