Texas-headquartered InterOil gave the go-ahead after announcing it had raised C$11.86 million via the placement of 862,500 shares at C$13.75 per share. The placement was led by a syndicate co-managed by Westwind Partners Inc and Jennings Capital Inc and included Peters & Co Limited and Canaccord Capital Corporation.
InterOil already has an extensive presence in PNG. The company is currently building a 32,500 barrel per day refinery which is scheduled to start producing at the end of the year. The majority of the refinery's offtake is already secured under contracts worth about US$1.4 billion with Shell Overseas Holdings Ltd and the PNG Government.
InterOil's CEO, Phil Mulacek, said the successful raising was a vote of confidence from the market in the company's strategy.
"This equity financing allows the company to execute the stated exploration program, commencing immediately," Mulacek said.
"This closing is enhanced by PNG's hydrocarbon potential and the recent tax improbements, which make PNG one of the world's most attractive tax regimes for hydrocarbon development."
Despite the announcement, the company, which is listed on both the PNG and Australian stock exchanges, saw its share price drop 4c to be currently trading at $1.49.
