Texon Petroleum, which will be based in Texas, plans to raise $20 million in its initial public offering.

To open on April 10, the IPO will see the placement of 40 million shares at 50c each.

After listing, the company expects to have a market capitalisation worth $45 million.

Armstrong finishes up as Global chairman this week, after which he joins Texon with chief executive David Mason, who founded Houston-based Wandoo in July 2005.

Wandoo, which will have a major 17.78% shareholding in Texon, is a joint venture partner in the Margarita project with Sun Resources and Victoria Petroleum.

Now Wandoo intends to work closely with its spin-off Texon, having given it first right of refusal until 2014 over all prospects generated from the evaluation of 133 3D seismic surveys covering 16,000 square kilometres of the onshore Texas Gulf Coast region.

From the 13 surveys evaluated by Wandoo so far, Texon has obtained leases over 15 prospects estimated to contain 35-70 billion cubic feet of gas net to the company.

“Texon’s prospects have been generated by Wandoo from 3D seismic surveys, which should significantly improve the likelihood of success,” Armstrong said in the company’s prospectus.

Ten of those prospects are considered shallow depth, lower risk targets, which Texon plans to drill in the third quarter of this year using the IPO funds.

“If short-term cash flow can be secured from successful drilling and production of the shallow targets, this cash flow will contribute to Texon’s ongoing leasing and drilling programs.”