Entek Energy Ltd, a spin off from Lion Energy (the former Kalrez Energy) today announced an Initial Public Offer to raise $3.5 million to explore for oil and gas in the northern areas of South Australia with five to seven wells to be completed by the end of 2004.
The Adelaide-based company has acquired a 12.5% joint venture interest in six petroleum exploration licences within the South Australian section of the Cooper Basin, all of which will be operated by experienced explorer Victoria Petroleum.
The Entek Offer announced today is fully underwritten by Taylor Collison Ltd and will close on July 20 with the Company planning to list on the ASX on 30 July.
Entek's exploration involvement will commence in August with participation in its first wildcat well in PEL 115.
"The surge of interest in the SA section of the province in the past three years has been justified by the spate of discoveries from at least five new independents now undertaking wildcat exploration there," Entek's executive chairman, Joe Mercorella, said today.
"We believe there is further potential yet, from within the lightly explored flanks and even some of the densely explored areas in the main production zone of the Cooper Basin," Mercorella said.
"Our intention is to get on the ground and participate in an immediate intensive program to include 5 to 7 wells by 30 December, in the three most promising tenements.
"These first year wells are close to infrastructure enabling early connection to transport and processing infrastructure from any successes."
Entek is offering up to 17.5 million ordinary shares at $0.20 cents per share to raise up to $3.5 million. In addition to the public offering, Entek's parent, Lion Energy Limited, will distribute in specie to Lion's 3,000 shareholders, 17.8 million shares of the current 63.8% or 22 million shares it holds in Entek.
It is intended that Entek will list on the ASX with 39.5 million ordinary shares on issue, notionally valuing the Company at listing at $7.9 million.
Proceeds from the IPO will be used to fund $1.4 million in exploration joint venture commitments during the current 2004-2005 financial year, and for working capital.
Entek's tenement interests cover in excess of 16,850sq.km, and include PELs 86, 87, 89 in the Eromanga Basin and PELs 104, 111 and 115 in the Cooper Basin.
The initial drilling program is targeting total estimated reserves of up to 74 million barrels of oil equivalent.
"This province has attracted commitments to approximately 37 wells in calendar 2004, including those planned by Entek, with the Basin yielding a current exploration success rate of around 40%," Mercorella said.
The Board of Entek comprises Adelaide lawyer and resource and energy sector investor, Mercorella as Executive Chairman; Adelaide chartered accountant, Nick Formichella; and Adelaide solicitor, Carmine Barone.
Former Origin Energy onshore exploration manager Rod Lovibond will provide consulting technical services to Entek.
