Strike Oil makes $4m placement

Perth-based Strike Oil Ltd has raised nearly $4 million in a private placement to shore up gas reserves at a tenement off the Gulf Coast of the United States.

Managing director Simon Ashton said the funds would be spent over the next couple of months completing a new exploration well at the Mesquite prospect off the coast of Texas.

The company is expecting first production from the Mesquite B prospect in March this year, with five to 10 wells planned.

At current estimates, Mesquite B holds between approximately 10 billion and 15 billion cubic feet of gas.

Strike Oil holds a 26.5 per cent working interest in the project.

Under the placement, Strike Oil has issued 22 million new shares at an issue price of 18 cents.

Shares in Strike were unchanged today at 22.5 cents.