West Perth-based Range Resources will go ahead with plans to raise $2.5 million which will be used to fund a new deal with a UK company over two oil and gas blocks in Georgia.
The company said it has entered into a heads of agreement with unlisted company Strait Oil and Gas to acquire a 50 per cent interest in the Republic of Georgia in Eastern Europe.
The two blocks, Vla and Vlb, were subject to significant exploration in the Soviet era however very few of the 200 wells drilled were targeting oil and gas.
Strait has already undertaken a review of the exploration data compiled in the Soviet era and found that 11 structures were suitable to host oil and 22 drilled wells displayed potentially commercial flow rates of gas.
Under the deal, which is subject to due diligence and necessary approvals, Range will complete the seismic surveys over the blocks, budgeted at between $US4-5 million.
Range will also be required to fund around $US1 million towards the project by the end of the year.
As a result, Range said it will proceed with a placement of $A2.5 million to parties identified by Straits, with shares priced at 3.5 cents each.
Range will also issue a total of 70 million of its shares and 70 million options to Strait after meeting certain exploration targets.
Strait will be able to appoint a nominee to the Range board.
Shares in Range were down 0.5c to 4.6c at 15:26 AEST.
