Wellington-headquartered Austral yesterday afternoon said it had signed agreements with a number of accredited investors to privately place 12.5 million ordinary shares, with attached warrants, at $US1.20 per unit.
Austral said proceeds would primarily be used to speed up the development of Cheal, with the goal of increasing the field’s reserve base and increasing hydrocarbon flows through the production station.
Last week Austral announced the successful tie-in of three Cheal B site wells into the production station and said they would increase total field production from about 450bpd to about 700bpd by the end of the year.
The company yesterday said the next development phase for Cheal would be to drill and tie-in two additional A site wells, targeting normalised field production of up to 1500bpd.
Austral operates Cheal with a 69.5% interest, while Canadian listed junior TAG Oil holds a 30.5% stake.
Austral further said that some of the capital raised would be used to fund other appraisal and development projects in Taranaki and Papua New Guinea, where it is concentrating on commercialising the Douglas gas-condensate discovery in licence PPL 235, the nearby Puk Puk prospect, and the Stanley gas-condensate discovery in PRL 4 in conjunction with InterOil and Horizon Oil.
In Taranaki, funds would be used to progress the appraisal of the nearby Cardiff gas-condensate field and to complete the buyout of small private New Zealand company International Resource Management Corporation, which previously held a 19% stake in Cardiff.
Austral said it had successfully re-completed the Cardiff-2A sidetrack discovery well, with detailed testing operations now scheduled for the first quarter of next year.
The Cardiff partners are operator Austral Pacific Energy (44.9%) and integrated energy company Genesis Energy (55.1%).
“This latest financing brings us flexibility and allows us to accelerate our onward program to enhance the value of our asset base,� said Austral president Thompson Jewell.
“We have also significantly extended the company's base of shareholders as approximately 63% of the shares were placed with investors newly introduced to Austral."
