Target Energy up 50% on deals

US-focused oil and gas exploration company Target Energy has announced plans for a $3.6 million capital raising, a farm-in agreement for a project in South Texas and changes to its board.

Shares in Target Energy jumped 54.17 per cent or 1.3 cents to 3.7 cents at the close of trade.

In a statement to the Australian Securities Exchange, Target said it had entered into an agreement to earn up to 50 per cent working interest and operatorship of properties covering approximately 13,000 acres in South Texas.

Target's managing director, Laurence Roe, said the project offered considerable upside for the Company.

"We are fundamentally testing a new resource play which appears to have considerable areal extent.

"Our analysis suggests that there is considerable untapped potential in the zone in question - both for gas and oil," said Mr Roe.

In a separate statement, Target said it hopes to raise the $3.6 million funds via a two tranche placement and a fully underwritten rights issue.

Investmet will assist the company in the process and act as underwriter for the proposed rights issue.

Target hopes to raise $2.73 million via the issue of 91 million fully paid ordinary shares at an issue price of 3 cents per share.

The second stage will be via a fully underwritten 1:8 pro rate non-renounceable rights issue to shareholders to raise $930,000.

In the board changes, Graham Riley will joint the board as a non-executive director replacing Paul Lloyd who is stepping down.

Stephen Mann and Ralph Kehle are also joining the board.

CAPITAL RAISING
USfocussed oil and gas exploration and production company, Target Energy Limited ("Target") (ASX:TEX) is pleased to announce a two‐stage capital raising to raise approximately $3.6 million via a two‐tranche placement and a fully underwritten rights issue. Target will be assisted by Investmet Limited ("Investmet") in the process. Investmet will also act as underwriter for the proposed rights issue.
Funds received from the raising will be used principally to continue the Company's exploration and development programs and to ursue potential acquisitions. The remainder will be utilised as working capital.
Stage 1 involves a two‐tranche placement to raise $2.73 million via the issue of 91,000,000 fully paid ordinary shares at an issue price of $0.03 per share and 91,000,000 attaching options. The placement will be made to sophisticated investors and the funds raised will be pursuant to the "excluded offer" provisions (Section 708) of the Corporations Act, 2001.
Stage 2 will be via a fully underwritten 1:8 pro rata nonrenounceable rights issue to shareholders. This offer will raise approximately $930,000.

RAISING DETAILS
The first tranche placement will raise approximately $705,000 via the issue of 23.5 million shares at a price of 3.0 cents per share and 23.5 million free attaching options. 7.83 million options will be exercisable at 5.0 cents until 31st
March 2012, 7.83 million will be exercisable at 7.0 cents until 31st March 2013 and the balance of the options will be exercisable at 10.0cents until 31st March 2014. The issue of the options will be subject to shareholder approval.
The second tranche placement will raise approximately $2,025,000 via the issue of 67.5 million shares at a price of 3.0 cents per share and 67.5 million free attaching options. 22.5 million options will be exercisable at 5.0 cents until 31st March 2012, 22.5 million will be exercisable at 7.0 cents until 31st March 2013 and the balance of the options will be exercisable at 10.0cents until 31st March 2014. The issue of the shares and options will be subject to shareholder approval.
The Rights Issue will raise approximately $900,000 and will be offered on the basis of one new share at an application price of 3.0 cents per share and one free attachingoption for every eight shares held. One‐third of the options will be exercisable at 5.0 cents until 31st March 2012; one‐third will be exercisable at 7.0 cents until 31st March 2013 and the balance of the options will be exercisable at 10.0 cents util 31st March 2014. The Rights Issue will be fully underwritten by Investmet Limited.
The Company will apply for quotation of the new shares on the ASX and a General Meeting will be held to seek relevant shareholdr approvals. Details of the timetable will be announced as soon as they become available.
ABOUT INVESTMET
Investmet is an unlisted public company managed by experienced industry professionals and supported by private high net worth ivestors (including its directors and management). It was created to pursue a variety of investment opportunities in resource projects with strong future demand growth and to inubate, develop and enhance the value of these investments through financial, technical and corporate support. Investmet is managed by Executive Chairman Michael Fotios, who is a geologist specialising in economic and structural geology, with extensive experience in exploration throughout Australia and overseas.
In the last 18 months Investmet has assisted and taken strategic positions in ASX‐listed Northern Star Resources Ltd and Pegasus Metals Ltd. Both of these Companies have since acquired new projects and enjoyed considerable success following the involvement of Invesmet.
March 2012, 7.83 million will be exercisable at 7.0 cents until 31st March 2013 and the balance of the options will be exercisable at 10.0cents until 31st March 2014. The issue of the options will be subject to shareholder approval.
The second tranche placement will raise approximately $2,025,000 via the issue of 67.5 million shares at a price of 3.0 cents per share and 67.5 million free attaching options. 22.5 million options will be exercisable at 5.0 cents until 31st March 2012, 22.5 million will be exercisable at 7.0 cents until 31st March 2013 and the balance of the options will be exercisable at 10.0cents until 31st March 2014. The issue of the shares and options will be subject to shareholder approval.
The Rights Issue will raise approximately $900,000 and will be offered on the basis of one new share at an application price of 3.0 cents per share and one free attachingoption for every eight shares held. One‐third of the options will be exercisable at 5.0 cents until 31st March 2012; one‐third will be exercisable at 7.0 cents until 31st March 2013 and the balance of the options will be exercisable at 10.0 cents util 31st March 2014. The Rights Issue will be fully underwritten by Investmet Limited.
The Company will apply for quotation of the new shares on the ASX and a General Meeting will be held to seek relevant shareholdr approvals. Details of the timetable will be announced as soon as they become available.
ABOUT INVESTMET
Investmet is an unlisted public company managed by experienced industry professionals and supported by private high net worth ivestors (including its directors and management). It was created to pursue a variety of investment opportunities in resource projects with strong future demand growth and to inubate, develop and enhance the value of these investments through financial, technical and corporate support. Investmet is managed by Executive Chairman Michael Fotios, who is a geologist specialising in economic and structural geology, with extensive experience in exploration throughout Australia and overseas.
In the last 18 months Investmet has assisted and taken strategic positions in ASX‐listed Northern Star Resources Ltd and Pegasus Metals Ltd. Both of these Companies have since acquired new projects and enjoyed considerable success following the involvement of Invesmet.
APPOINTMENT OF DIRECTORS
Graham Riley
Target is pleased to advise that highly regarded oil and gas professional Mr. Graham Riley has accepted an invitation to join the Target Energy board in a non‐executive role. Mr. Riley will succeed founding director Mr. Paul Lloyd who is stepping down from the board.
A founding Director of ARC Energy and former non‐executive director of Adelphi Energy, Graham is a qualified legal practitioner (B Jur, LLB).

Graham has been responsible for the foundation and growth of a number of petroleum and mining companies and is currently Chairmn of Buru Energy, an ASX‐listed oil and gas exploration company and of Giralia Resources, a diversified mining and exploration company which has been responsible for the spin‐off of five independently listed commodity‐specific explorers from the extensive project book it had built over recent years.

Graham, who also holds private petroleum interests in the US, brings a wealth of experience to the Target board through his involvement with a number of other oil and gas companies and othr resource industry directorships and has a proven record of assisting to generate value for shareholders.

Stephen Mann
Subject to the shareholder confirmation of the planned placement, the Company will appoint Mr. Stephen Mann as a non‐executive director of Target Energy Limited.
Stephen will bring a wealth of investment experience to the Target board. He is a Fellow of the Institute of Chartered Accountants of Australia and has more than 30 years of experience in public practce. He was a partner in BDO Chartered Accountants and Advisers (Perth) for 22 years with the last 11 years in the role of managing partner. Stephen established the Corporate Finance division of BDO Perth and was the partner in charge of this division until he retire from practice in 2003. Since 2003, Stephen has acted as the chief financial officer and more recently as a consultant to the Nacap Asia Pacific Group. (A large Dutch Group that specialises in the construction of oil and gas pipelines). He is also the Chairman of Pegasus Metals Ltd and a Director of Investmet Limited.

Second statement below:

US‐focussed oil and gas exploration and production company, Target Energy Limited ("Target" or "the Company") (ASX:TEX), is pleased to advise that it has entered into an agreement to earn up to a 50% working interest and operatorship of properties covering approximately 13,000 acres (the "Buffalo" Project) in South Texas, USA.

Under the terms of the agreement Target will fully fund the fracture stimulation ("frac") of an existing well at the Buffalo Project to earn a 100% working interest in the relevant zone in the borehole until pay‐out with Target's working interest to revert to 50% after pay‐out.

Target will also earn an option to frac a second well under similar terms, which in turn will earn it an option to drill and complete a new horizontal well in the project area on the same terms.

Following the drilling of the new well, should Target then elect to undertake more work in the project area, it will be assigned a 50% working interest in the entire leasehold. The Company will also retain options to frac any other wells in the project area currently owned by the existing partners. The partners in the project are private US companies.

Target will operate the frac and drilling programs and will be assigned operatorship of the entire project at such time as it i assigned the 50% working interest in the entire leasehold.

Target's Managing Director, Laurence Roe, said this project offered considerable upside for the Company. "We are fundamentally testing a new resource play which appears to have considerable areal extent. Our analysis suggests that there is considerable untapped potential in the zone in question - both for gas and oil.

"Once we can confirm this with our proposed frac programs, we plan to go ahead and drill a new horizontal well to fully assess its potential. Success in the drilling will then allow us to develop a substantial ongoing campaign.

"Target's entry cost for this is low risk -just the fraccing of one well and some leasing costs. All other work will be at Target's discretion and subject to the results of the preceding programs.
"Importantly, as Operator, Target will have control over the timing and extent of the programs. We have already commenced the design of the first frac and are looking to engage a suitable frac crew in the next few weeks," Mr Roe said.