21/05/2009 - 13:37

Red Fork Energy raises $5m for US assets

21/05/2009 - 13:37

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Oil and gas explorer Red Fork Energy has raised $5 million through a placement to fund the development of its projects in Oklahoma.

Red Fork Energy raises $5m for US assets

Oil and gas explorer Red Fork Energy has raised $5 million through a placement to fund the development of its projects in Oklahoma.

The US-focused company said it received strong demand from overseas-based institutional investors and existing shareholders for the issue of 10 million new shares priced at 50 cents each.

Shares in Red Fork were up four cents to 61.5 cents at 15:14 AEST.

 

 

The announcement is below:

 

US-focused oil and gas exploration and production company Red Fork Energy Limited ("Red Fork" or "the Company") is pleased to announce that it has agreed to place 10 million new fully paid ordinary shares at a price of A$0.50 per share to raise A$5,000,000 ("the Placement").

Strong demand was received from a range of overseas based institutional investors and existing shareholders resulting in the Placement being significantly oversubscribed and priced at a A$0.01 discount to the volume weighted average price of Red Fork shares over the last 30 days.

Chess Capital Partners Pty Ltd acted as lead manager to the Placement.

No shareholder approval is required for the Placement which is permitted under the Company's 15% annual placement capacity.

The funds raised will be used for the continued development of Red Fork's 100% owned oil and gas projects in Oklahoma ("East Oklahoma", "West Tulsa" and "Osage") in the United States, including the escalated development of its exciting and fast moving 50,000 acre gas discovery at East Oklahoma.

Importantly, the funds raised will ensure that Red Fork will be able to fund ongoing development at all three of its oil and gas assets on a standalone basis and without the introduction of a joint venture partner. This will enable the Company to maintain its 100% ownership of all three projects leading into increased production revenues. Red Fork will continue to remain debt free with in excess of A$8,000,000 available in working capital.

Significant progress has been made on all three oil and gas projects and Red Fork anticipates that it will now be able to bring its largest project in East Oklahoma into production this calendar year. Red Fork recently upgraded the production capacity and reserve potential at East Oklahoma following successful gas flow testing where potential stabilized daily flow rates were upgraded to 300,000 cubic feet of gas per day per well. Red Fork expects to be able to drill in excess of 600 wells at East Oklahoma.

Red Fork Managing Director David Prentice commented "We have experienced an increasing level of interest the Company's activities and the vast potential associated with our oil and gas assets in Oklahoma and we are delighted by the strong demand from institutions and existing shareholders in this Placement. It is an exciting time for Red Fork and its shareholders as we are moving rapidly towards having three profitable 100% owned production centers in Oklahoma."

 

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