The options will be exercisable at 25c on or before January 31, 2012. Another 40 million shares will be issued to SAPEX’s founders, seed capitalists and directors.
The IPO opens on April 2 and closes on April 30. SAPEX expects to list around May 11.
The company first moved to float late last year, but hold ups with Australian Securities and Investment Commission approvals meant the prospectus would not have been released until just before Christmas, so the start-up decided to delay the IPO until early this year.
Unfortunately, this meant launching into a more difficult market, SAPEX managing director Andrew Andrejewskis told PetroleumNews.net.
“Market conditions have changed over the past few months and we are now aiming to raise $12 million rather than the $15 million target we set last year,” he said.
This means initially drilling two wells rather than two to four holes as previously planned, but otherwise SAPEX’s exploration plans remained unchanged, he said.
SAPEX has seven petroleum exploration licences covering about 65,000 square kilometres – essentially the entire prospective area of the virtually unexplored Arckaringa Basin in north-central South Australia.
The company says this basin has the potential for significant oil and conventional gas discoveries as well as coal seam methane potential from known sub-bituminous coal deposits.
According to Andrejewskis, the Arckaringa’s geology is analogous to the Cooper Basin, Australia’s most prolific onshore oil and gas province, but post-Triassic uplift meant most of the targets were shallower than in the Cooper.
Therefore, reduced pressure meant the large but relatively shallow structures targeted by SAPEX were less likely to hold large amounts of gas, but the basin was highly prospective for oil and CSM, he said.
“The area has been assessed by previous explorers to have oil potential of more than 900 million barrels before considering the associated risk factors,” Andrejewskis said.
SAPEX also holds two coal mining exploration licences within the Arckaringa licence areas as well as the PEL 120 lease near Adelaide, which also is expected to have CSM potential.
The company is in discussions with various parties over how this coal can be commercialised, but its key priority is to begin exploring for oil deposits and to undertake a thorough appraisal of the Arckaringa Basin’s CSM.
Secondary priorities included appraisal of the CSM potential of PEL 120 near Adelaide, and investigation of coal commercialisation and coal-to-liquids feasibility in the two Arckaringa mining licences.
Andrejewskis is a geologist who has headed government resource sector departments in SA and the Northern Territory.
