Perth-based oil and gas explorer Strike Oil Ltd has announced plans to raise $4.9 million through a non-renounceable entitlements offer, one month after withdrawing a $7.9m entitlements issue because of inconsistent drilling results.
Perth-based oil and gas explorer Strike Oil Ltd has announced plans to raise $4.9 million through a non-renounceable entitlements offer, one month after withdrawing a $7.9m entitlements issue because of inconsistent drilling results.
The company aims to expand its development of the Mesquite Gas Production Project in the Gulf Coast, Texas and other exploration areas.
It will issue 22.3 million shares at 22c each, to be distributed on a basis of one for every ten shares held. The deal is not underwritten, though the company has set a minimum subscription level of $1.6 million.
The entitlements issue will open on December 18 and close on January 12.
Perth-based Strike Oil Ltd aims to raise $7.9 million to fund US expansion through a non renounceable entitlements issue, the company announced today. inconsistent drilling results.
The full text of a company announcement is pasted below
Strike Oil Limited is pleased to announce a one for ten Non-Renounceable Entitlement Issue at 22 cents to raise up to approximately $4.9 million.
Further to the announcement on the 23 November 2006 to withdraw the Entitlement Issue which was announced on the 7 November 2006 to raise up to $7,983,455 Strike Oil has now completed its review of capital needs in light of the reduced program referenced in the announcement of the 23 November and other activities to determine its revised capital needs.
These additional funds are required for Strike Oil's continued expansion of its US activities.
Three areas of significant expansions are planned.
Firstly, at the Mesquite production project we are continuing with additional development activities at the Mesquite production project in the Gulf Coast, Texas which include the fraccing of further zones and bring onto production other completed producing zones in the existing wells. This work is underway and will continue to proceed over the next two months. Additionally, we are planning to drill a shallow gas well to appraise opportunities recognised at less than 5,000 feet while drilling the initial Mesquite wells.
Secondly, we are in the process of committing to the extension of our area of exploration with Operator, Cypress E&P in the Gulf Coast, which will involve the acquisition and processing of further existing 3-D seismic data over the next three months. This will provide for a steady flow of new prospects for drilling and will build on the current success.
Finally, have committed to the acquisition of the Florence Oilfield redevelopment project where we will shortly be commencing field operations on the recently acquired new oil project in Colorado. We will be earning a 26% Working Interest in the Florence Oilfield where acquisition of 3-D seismic is planned to start in the next two months.
These additional activities in conjunction with our ongoing program of appraisal drilling at Tow Creek/Bear River in Colorado and exploration drilling which is expected to commence some time between December 2006 and January 2007 on the large gas prospects in the Gulf Coast have resulted in the need for these additional funds.
These program expansions are consistent with our stated strategy of growing US activities in the Gulf Coast and Rocky Mountains regions.
Strike Oil is now expecting to have three drilling rigs working simultaneously within the next three months hence running some of the projects in parallel rather than in sequence representing an acceleration of activity.
The combination of the new work and existing program will enhance Strike Oil's portfolio of assets in its four key areas of activity and could see Strike Oil with production from three of its core areas by the middle of 2007.
