ASF expands Canning Basin influence

Sino-Australian investment house ASF Group will become the single largest shareholder in Perth-based Key Petroleum after agreeing to a 19.9 per cent placement of Key shares as the company expands its interests in Canning Basin oil and gas plays.

ASF will afford a premium price on Key's five-day volume weighted average share price, buying shares in the capital of the company at 1.3 cents per share for a total subscription of $1,175,815.

As part of the agreement, ASF chairperson Min Yang will join the Key board as the company seeks to gain further exposure into Western Australian oil and gas fields.

In June 2013, the company entered into the Canning Basin by purchasing a 20.5 per cent interest in Rey Resources and has access to Asian markets as a facilitator of cross-border investments between Australia and China.

Key Petroleum holds interest in five Canning Basin permits and one in the Perth Basin and will use the investment as an opportunity to progress upcoming projects.

"ASF's investment is a turning point for the company," Key managing director Kane Marshall said.

"Their placement not only adds skill and knowledge to strengthen the board and share register, but allows us access to new funding avenues both in Australia and Asia for Key's working capital requirements and monetary needs for upcoming projects.

"Given the tough conditions for small companies to access capital, this transaction means Key can focus on exploration without being concerned over obtaining capital in a volatile market and enables the company to put its full attention into progressing farm outs and drilling campaigns over the next couple of years." 

Shares in Key are unmoved at 1.4 cents per share, while ASF shares remain at 9.5 cents per share, as of 7:45am, WST.