With the offer made up of 75 million shares at 20 cents per share the company is looking to take advantage of the current record high oil prices.

Merlin said float proceeds would be used to fund its exploration program in the Cooper Basin in central Australia, with plans to later move into higher-risk Pedirka and Wiso Basins in the Northern Territory and South Australia.

Chairman Jock McGregor – formerly a senior BHP Petroleum executive – said the company has budgeted every well to full completion, so any discovery would not suffer delays from having to raise development capital.

The funds saved by not developing non-commercial holes would then be rolled over, possibly enabling another exploration well to be drilled.

Previous exploration has uncovered evidence of three live oil systems in the region, according to John Heugh who assembled the portfolio in the late 90s prior to the second wave of Cooper Basin discoveries.

Of the money to be raised $10 million is earmarked from the AIM exchange with the remaining $5 million on the ASX. The current owners will retain a 25% interest in the company taking the total shares on issue to 100.6 million shares. The planned listing date is September 10.

In Australia the float is being handled by Montagu Partners and in the UK is sponsored by Hoodless Brennan.