The issue – underwritten by Ord Minnett and substantially oversubscribed – involved the placement of 15 million shares at $2.00 per share to Australian and International investors. It comprises less than 15% of Petsec’s issued capital, according to Petsec executive chairman Terry Fern.
“The funds will be applied primarily toward the drilling and development of Petsec’s Vermilion 257 lease, where 3D mapped targets of 40 billion cubic feet of gas (bcf) have been identified,” Fern said.
“It is intended that gas discoveries from this drilling would be produced from our existing Vermilion 258 production platform, which has considerable spare production capacity.”
The share raising was undertaken to address the financial effects of Hurricanes Katrina and Rita.
“Interruption by hurricanes to Petsec’s production over a four-month period last year had diminished the expected working capital for the company’s 2006 program,” Fern said.
“This would otherwise have caused some delay in our 2006 exploration and development program, which will expose the company to greater than 50bcf of gas. While Petsec will continue to fund most of its exploration and development activity from cash flow, this successful share placement will enable us to bring forward to May the drilling of our prospects at Vermilion 257 ahead of the hurricane season.”
Petsec’s exploration and development program for the rest of the first half of the year now includes the Main Pass 18 G-6 well, which is currently drilling ahead and is expected to reach target early next week; one well in China, expected to start in April to test a 20 million barrel of oil prospect; and two to three wells on the Vermilion 257 lease.
On Monday, Petsec posted a net profit for 2005 of $US9.5 million ($A12.79 million).
This was down 50% on the $18.9 million it posted in 2004, but the company said the difference between the profit figures was largely due to the recognition of an income tax benefit of $7.7 million in the 2004 figure.
Petsec’s earnings before interest, tax and exploration expenses jumped 48% to $38.3 million and its revenue after royalties for the year rose 39% to $45.5 million.
