Buru to raise funds for Ungani

Onshore oil company Buru Energy has tapped investors for $10.2 million to fund ongoing development of its Ungani operation in the Canning Basin.

Perth-based Buru has launched a one-for-five entitlement offer priced at 15 cents a share, representing a 22 per cent discount to the company’s 15-day volume-weighted average price.

As part of the raising, two of Buru’s existing major shareholders have exercised their entitlements to subscribe for a combined $1.7 million worth of the raising.

The proceeds from the raising will be used to fund a drilling operation at Ungani, where Buru recently bought out joint venture partner Mitsubishi Corporation to move to full ownership.

“We have recently completed a series of transactions that have put Buru on an exciting new path towards potential growth and value realisation in the short to medium term,” Buru chairman Eric Streitberg said.

“Following the asset swap transaction with Mitsubishi that has delivered the company 100 per cent ownership of the Ungani oilfield and the surrounding conventional oil exploration acreage, the company’s immediate focus is the accelerated development of the Ungani field.

“The company requires additional capital to undertake this development program in a timely manner.

“Whilst there are several possible ways to access additional funding, the board considers an attractively priced rights issue as the fairest way to allow all shareholders to participate in the forward program.”

Buru shares were 15.7 per cent lower to 17.7 cents each at 1:45pm.