PERTH (miningweekly.com) – ASX- and TSX-listed oil and gas producer AusTex Oil is looking to raise $17.5-million to fast-track the development of its Snake River project, in Oklahoma.
US-focused AusTex said on Monday that it would issue up to 116.6-million preference shares over two tranches, to US investors. The first tranche would comprise 43.3-million redeemable convertible preference shares, while the second tranche would consist up to 73.3-million shares.
Each share would have a subscription price of 15c a share.
AusTex’s largest shareholder, Ptolemy Energy Holdings, would take at least 75% of the offer.
“The company has historically been able to sustainably fund steady growth with a commensurably moderate level of drilling. Ptolemy’s conviction in and financial support of our opportunity and our team will result in a fast-paced growth programme that should deliver improved financial and production performance,” said AusTex executive chairperson Richard Adrey.
He noted that funds from the transaction would also be used to meet working capital requirements and to meet convertible note obligations.
The Snake River project is wholly owned by AusTex, which has drilled six vertical wells per quarter, since July 2012. As of June, the company had drilled 23 new wells and had deepened two old wells.