Titan secures $US50m funding for exploration

Shares in Perth-based oil and gas explorer Titan Energy have surged on news it has signed a $US50 million funding deal with an undisclosed US-based investor to pursue drilling programs at its Allen Dome oil project in Texas.

In a statement today, Titan said it was carrying out initial work at Allen Dome, which consists of the recompletion of five existing wellbores, with drilling of five new development tests to begin in February.

Under the terms of the deal, Titan will receive $US1.65 million immediately from the investor for work at Allen Dome.

In the drilling of the five wells, the investor will pay 75 per cent of the actual costs for a 50 per cent working interest ownership of the wellbores.

Titan will pay 25 per cent of the actual costs for a 50 per cent working interest.

The investor, which has been described as a “leading US-based oil and gas, energy funding partner and exploration and development company”, will commit at least $US5 million to the initial work at the project, subject to ultimate well costs.

“A second Titan project, slated for funding by mid-2015, is already being prepared for participation by (the investor),” Titan said.

“Titan is currently completing a number of acquisitions across the US Gulf Coast, which meets (the investor’s) criteria for development.”

Executive chairman Darren Levy said the agreement was a significant development for Titan and would have an ongoing impact on the company’s shareholder value.

“The financial capacity that (the investor) provides is huge for a company of our size,” he said.

“To have the cash flow to pursue all our planned drilling programs is a game changer. At a time when the majority of oil and gas companies are announcing major reductions in their capital expenditure budgets and drilling plans, we are going significantly the other way.”

Shares in Titan were up 20 per cent to 3 cents per share at 12pm.