Beira Energy Ltd has released a prospectus to raise $6.75 million to earn a 75 per cent interest in onshore prospects which it says have the potential to match some of the fields in the North West Shelf of Western Australia.
The company continues the trend of several Australian resources companies which have successfully identified low-cost, high reward opportunities in Africa.
Mozambique, in particular, has attracted attention as the country's political climate stabilises, with World Bank backing, with a government determined to rebuild the economy through private enterprise and keen to encourage international investors.
It has already significant foreign investment in place or being planned, including BHP/Billiton's $2 billion Mozal alumina smelter and WMC's Corridor mineral sands project.
Beira will fund two wells to earn its 75 per cent interest, through drilling relatively shallow holes to 2,000 metres.
"We plan to drill these wells by December this year," said the executive chairman, Mr Adrian Larking. Mr Larking is a former WMC Petroleum executive with more than 30 years experience in the petroleum and mineral sands industry, and has been associated with some small unlisted companies over the last number of years.
"The onshore Zambezi Basin, which we have targeted, already has two major discoveries with reserves of more than four trillion cubic feet of gas and condensates," he said.
The same geological team which explored and appraised one of those fields is Beira's co-venturer in the exploration venture and has identified drilling locations based on existing seismic evidence.
"Importantly the infrastructure will be in place to allow development of any discovery, with the $1.32 billion South Africa-Mozambique gas pipeline being constructed," Mr Larking said.
"This represents an outstanding opportunity for a junior Australian company to participate as the major participant in a potentially world-class energy project.
"We have identified the large prospect, have confidence through existing geological data it is highly prospective and now will put the financing in place to pursue that opportunity."
The capital raising program is in two stages, with the prospectus issued today aiming to raise $6.75 million by offering a package of two 10 cent shares and one 25c share plus one free March 2004 option for every two 25c shares.
Beira Energy will then conduct a second raising for $6.75 million offering one 25c share and one free March 2004 option for every two 25c shares held. That raising is planned for next month.
The prospectus can also be viewed on the company's website: www.pps.net/beiraenergy
Note: The company has advised us that this URL is currently unavailable but will be workable in the next few days.
