The funds raised on the Australian Stock Exchange, in addition to cash reserves, will provide upstream development of the Kogan North and Daandine projects and develop the Tipton West project, the company has said.

It is proposed the balance of funding for Tipton West will be funded by a joint venture and project finance sources.

Arrow said the money would also provide upstream appraisal/pilot funding for the Silverdale, Dundee and Mount Lindesay projects, and funding towards Arrow’s share of the exploration and appraisal programs on its projects in the Surat and Clarence Moreton basins near Brisbane, and the Queensland coastal basins near Gladstone.

Arrow said the placement would target institutional and sophisticated investors who had committed to subscribe for 28.9 million shares at issue price of A38c per share to raise $A11 million before issue costs.

There will also be a one-for-seven pro-rata renounceable rights issue to shareholders at A36c/s to raise about $A6.5 million before issue costs.

The funds would also be used to prove up additional gas reserves through exploration, appraisal and pilot production programs, the company said.

The first tranche of $A6,764,000 (17.8 million shares) would be settled on or about July 21, with the second tranche of $A4,236,000 (11.1 million shares) subject to shareholder approval at a general meeting on August 23, Arrow said.

Rights trading will start on July 21, and finishing on August 16, with acceptances a week later.