The company said the first part of the placement would see up to 14,500,000 shares placed to institutional and private investors at 31c per share to raise up to $4.5 million.
The second part of the placement would offer up to 5 million shares within a three-month period. The shares would be offered at a price not less than 80% of the average market price.
According to Austin, the funds raised from the placement would be used to support business development, establish a base to enable Austin to expand its operations in oil and gas exploration, and to finance the growth of the company's continuing operations.
Managing director David Schuette said he was pleased with the response to the share purchase plan in which about $2.5 million was raised, but recognised the need for the company to forge ahead as quickly as possible to capitalise on the potential in its Park City project in the United States and other areas of interest.
The additional capital raising is subject to shareholder approval.
In other company news, Austin has begun drilling four additional wells at its Park City natural gas project in Kentucky, US.
According to Austin, the wells - Aus-Tex PC 15, 16, and 17 - present probable pay zones in the Fort Payne Formation, New Albany Shale, and Coniferous formations.
The fourth well, Aus-Tex PC 18, only presents probable pay zones in the Fort Payne Formation and the New Albany Shale, the company said.
Austin added the Fort Payne Formation in the four wells would be acid stimulated to increase their initial production rate.
Meanwhile, the company has also begun acid stimulating a portion of the Fort Payne zone in the Aus-Tex PC 1 well.
Production from zone has produced 10 million cubic feet of gas.
Austin is also planning to connect the Aus-Tex PC 10 well to its gathering system, which is expected to contain both oil and natural gas in the Coniferous formation.
Aus-Tex PC 10 will be followed by Aus-Tex PC 2 and PC 9, which are also expected to be productive from the Coniferous formation.
According to Schuette, the company's intensive drilling activity has resulted in 18 wells being drilled to date.
"With the natural gas processing plant now operating, Austin Exploration is broadly in line with its timetable for gas sales," he said.
Austin's gas will be purchased by Atmos Energy Marketing at daily spot market rates and distributed into domestic markets across the east coast of the US.
Up to 44 producing wells are expected to be completed at Park City by the end of calendar 2008.
The company predicts that by the end of 2011 a further 200 wells would have been drilled.
Austin has a 75% working interest and a 65.625% net revenue interest in every well it drills at Park City.
