West Perth-based Oilex Ltd has raised $67.5 million through a placement to Hartleys Ltd to raise funds for exploration of oil wells in India and Oman, as well as Australia and East Timor.
West Perth-based Oilex Ltd has raised $67.5 million through a placement to Hartleys Ltd to raise funds for exploration of oil wells in India and Oman, as well as Australia and East Timor.
The full text of a company announcement is pasted below
Australian-based Oilex Ltd (ASX: OEX, AIM: OEX) has underscored the Company's aggressive global growth strategy with the announcement of a landmark A$67.5 million institutional capital raising to expedite exploration and development programs focused on India and Oman in 2007 and incorporating wells offshore Australia and in the Joint Petroleum Development Area (JPDA) between Timor-Leste and Australia in 2008.
The Company will issue up to 50 million ordinary shares to international and domestic institutional investors at an issue price of $1.35 per share, to fund potentially high value-adding work programs in India and Oman, starting in third quarter of this year. The share placement, to predominantly institutional clients of Hartleys Limited, the manager of the raising, is subject to shareholder approval at a meeting to be convened in early June 2007.
The scheduled programs to be funded by the capital raising include the drilling of up to 14 wells within five projects and 2D and 3D seismic data acquisition for three exploration blocks and known fields. Simultaneously, Oilex will continue to review additional exploration and production opportunities in the area of the Indian Ocean rim as part of its growth strategy in the international oil and gas industry.
The placement follows the recent award of a contract for a land drilling rig to complete an approved program of six wells within the Cambay Field, India and two wells planned for the Bhandut Field, Gujarat State, India. The rig and drilling services contract with Dewanchand Ramsaran Industries of India covers a defined nine-month period, with an extension option for up to two years.
Oilex anticipates completing the approved Cambay Field program within the initial nine-month period, and expects to follow this with further drilling which will target locations identified by recent mapping of newly acquired 3D seismic data for the field. The 3D survey is of excellent quality and has given a very high level of confidence in the understanding of the subsurface structure and the distribution of hydrocarbons in Cambay Field.
Recent estimates of the resource targeted by the drilling program total 48 million barrels of oil originally in place and 302 billion cubic feet of gas in place, after accounting for the volumes produced from the field to date.
In Joint Ventures with Gujarat State Petroleum Corporation Ltd, Oilex (Operator) has recently achieved a significant increase in production from the Sabarmati-1 well, to 97 barrels of oil per day (bopd), plus water, from a previous rate of 2 - 5 bopd, plus water, and is conducting testing of an identified oil zone in the Cambay-72 well that was drilled in September 2006.
In addition to its ongoing exploration, development and rehabilitation programs within three fields in India during 2007, Oilex plans to drill one well in the offshore Otway Basin, South Australia with its Indian Joint Venture partners GSPC and Videocon early in 2008.
The Company is also on track, later this year, to acquire new seismic data and to progress the drilling plans for its interests in the JPDA.
Drilling in Oman is projected to start also in the Third Quarter 2007 with 2-3 wells planned on prospects that appear to be good analogies of the fields that are producing in the main basin immediately to the west of the Oilex-operated block.
Oilex's Managing Director, Bruce McCarthy, said the successful A$67.5M capital raising represented the most important step in the Company's short history towards realising its global growth vision.
"It will underpin our firm drilling and seismic acquisition programs and enables us to continue to assess the many opportunities in the Company's portfolio, particularly those in Gujarat, India and Oman," Dr McCarthy said.
"We are very pleased to welcome new institutional and retail investors to our register as we move to the next growth level across our existing asset base and target additional opportunities to secure the Company's longer-term future. We believe that the new investors add substantial strength to the share register which is to the ultimate benefit of all shareholders," he added.
Following completion of the placement, Oilex will have in excess of A$72 million in cash reserves and approximately 130 million shares on issue.
