Rey to raise $3m

Rey Resources has entered into an agreement to raise $3 million which will fund a new well in the perth basin, as AWE also this week commenced drilling a new well in the same region. 

The Perth oil and gas explorer said it had executed a subscription agreement with a private investor to raise $1 million and is in the process of completion documentation concerning a further $2 million.

The 10 cents per share raising will be made to sophisticated investors, and will increase its cash balance to about $5 million.

The funds will be used to help finance the earn-in requirements of the Dunnart-2 well in the Perth Basin, a joint venture between Key Petroleum and Caracal Exploration.

In May, Rey said it would contribute about 87 per cent of the costs involved in the well, capped at $1.7 million, to earn up to about 43.5 per cent in equity.

Key said it plans to drill the well to a depth of 670 metres, after clearing all regulatory constraints and striking a deal with DCA Drilling.

Last week Key announced that earthwork operations and rig mobilisation had begun at the wellsite.

Rey last traded at 10.5 cents per share at 9:20am WST.