West Perth-based Liquefied Natural Gas Ltd has announced plans to spin out subsidiary Gas Link Global Ltd after completing a capital restructure on the company and raising $7.5 million.
The full text of a company announcement is pasted below
The Company's directors are pleased to announce that the Company has undertaken a restructure of it's formerly 100% owned subsidiary Gas Link Global Limited (GLG), comprising:
1. conversion of the Company's shareholder loan of ~$2.4 million to GLG, to 47 million shares in GLG;
2. capital injection of $2.5 million by the Company for the issues of 33 million shares in GLG; and
3. third party capital injection of $5 million for the issue of 50 million shares in GLG.
Following the restructure the Company will hold 100 million shares in GLG, representing 66.7% of the issued capital. GLG remains a strategic part of the Company's objective to secure direct influence or control over gas resources as potential feedstock for the development of liquefied natural gas (LNG) projects by the Company.
However, it is the Company's intention that GLG become self funding and hence, aside from the above capital raising, it is proposed for GLG to undertake an initial public offering of its shares on the Australian Stock Exchange in 2008, subject to equity market conditions at the time.
GLG's primary business activities include the identification, and selected investment in, existing gas discoveries and prospective gas acreage where the fundamentals support the potential commercialisation of the gas through
sale to markets accessible by existing or proposed gas pipelines and/or LNG production.
In addition, in the current energy environment, any oil or condensate commercial discoveries within the gas focused acreage should be able to be quickly brought to market and generate early cash flows.
GLG's activities have to date been focusing on Papua New Guinea (PNG) which contains a reported 17.3 trillion cubic feet (tcf) of gas resources; 660 million barrels (bbl) of oil and some 3.7 tcf in un-committed gas resources. GLG has secured three key assets:
The 4 adjoining/contiguous PPU licenses are located in the Western Province/Foreland area of PNG and cover a total area of around 38,000 sq kilometres. The Western Province/Foreland area is relatively under explored, despite a relatively high discovery success rate of ~1 in 3.
Pursuant to a Heads of Agreement with PPU, Liquefied Natural Gas Limited has the right to purchase gas from any commercial discovery made by PPU in relation to its 4 licences, delivered to the PNG coastline near Umuda Island, for either the development of a floating LNG production vessel or an on-shore LNG plant, which onshore plant would be likely to replicate Liquefied Natural Gas limited's proposed LNG plant at Gladstone, in Queensland, Australia.
Refer to the attach map for the location of Gedd (PNG) Limited and PPU's licence interests and LNG plant, onshore and floating LNG production vessel, sites under consideration.
Funds from GLG's $7.5 million capital injection will be applied to:
The $5m third party capital raising was managed by Western Australian based Australian Heritage Group.