http://www.proactiveinvestors.com.au Proactiveinvestors RSS feed en Sat, 22 Sep 2018 05:33:55 +1000 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[Media files - Fundamental Research targets Permex Petroleum at Buy ahead of growth plans ]]> http://www.proactiveinvestors.com.au/companies/stocktube/9891/fundamental-research-targets-permex-petroleum-at-buy-ahead-of-growth-plans-9891.html Wed, 18 Jul 2018 15:02:00 +1000 http://www.proactiveinvestors.com.au/companies/stocktube/9891/fundamental-research-targets-permex-petroleum-at-buy-ahead-of-growth-plans-9891.html <![CDATA[News - Permex Petroleum started at 'Buy' at Fundamental Research ahead of accelerated growth plans ]]> http://www.proactiveinvestors.com.au/companies/news/201083/permex-petroleum-started-at-buy-at-fundamental-research-ahead-of-accelerated-growth-plans-201083.html Junior oiler Permex Petroleum Corp (CNSX:OIL) has had a 'buy' rating bestowed upon it by Fundamental Research.

It puts a target on the shares of C$1.46, which is a hefty distance from where they stand now at around C$0.44.

READ: Permex Petroleum started at Buy at Fundamental Research ahead of accelerated growth plans​

The company has not been standing still since completing its IPO (initial public offering) in May, raising over C$4mln gross, and has been on an acquisition spree since. It has no debt.

Permex’s current portfolio includes eight producing properties, mainly focused on light oil,  including six in Texas, and two in New Mexico, Fundamental Research points out.

The firm has identified the potential for at least 59 new wells on the properties. The current gross daily production is 198 barrels of oil equivalent per day.

Fundamental says that if production remains flat at 122boepd (barrels of oil equivalent per day net) in 2018, it estimates that the firm can generate revenues of C$2.74 million, with a net loss of C$1.18mln.

It says its forecasts are very 'conservative' as Permex's management’s 2018 exit production estimate is for between 400 and 500boepd (gross).

For 2019, after the horizontal development of leases, it is between 3,000 and 4,000boepd (gross).

"We will adjust our forecasts as the company announces further details on its development plans," it adds.

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Wed, 18 Jul 2018 13:42:00 +1000 http://www.proactiveinvestors.com.au/companies/news/201083/permex-petroleum-started-at-buy-at-fundamental-research-ahead-of-accelerated-growth-plans-201083.html
<![CDATA[News - Permex Petroleum completes acquisition of West Texas assets to grow company ]]> http://www.proactiveinvestors.com.au/companies/news/200139/permex-petroleum-completes-acquisition-of-west-texas-assets-to-grow-company-200139.html Permex Petroleum Corp (CSE:OIL) said it had completed the previously announced strategic acquisition of two producing assets in West Texas via its deal with Energy Properties 2000-1 LLC.

The junior oiler now holds a 41.4% working interest in the ODC San Andres unit and 48% in the W, J. "A" Taylor lease.

READ THE BIG PIC: Permex Petroleum primed for production growth in the Permian basin

Notably, the deal increases its Texas assets held by production (HBP) to 3,955 acres -  an increase of 44%.

It also lifts the firm's 2P oil and gas reserves to around 9mln barrels of oil equivalent (boe) -  an increase of 25.6%.

"We are very pleased to complete this highly anticipated acquisition integrating the ODC and Taylor leases into the long-term scale growth of the company," said Mehran Ehsan, the president and chief executive.

"This not only provides us access to work side by side with one of the world’s elite oil and gas operators, but will also allow us the potential for future synergies.

"This acquisition also comes at a time we feel crude oil is entering a more bullish cycle."

WATCH: Permex Petroleum acquisition increases held-by-production by a third

It also means Permex can expand its operational footprint in the region and have a working interest partnership on the field with oil major Occidental Petroleum Corporation (NYSE: OXY).

As reported previously, the total purchase price of around US$1.95mln in cash, includes over US$1.2mln in equipment on the field and the yard within the lease.

Offset operators to this property include Occidental Petroleum (NYSE:OXY), Devon Energy (NYSE:DVN), Hess Corporation (NYSE:HES), and Fasken Oil and Ranch.

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Wed, 04 Jul 2018 10:22:00 +1000 http://www.proactiveinvestors.com.au/companies/news/200139/permex-petroleum-completes-acquisition-of-west-texas-assets-to-grow-company-200139.html
<![CDATA[Media files - Permex Petroleum acquisition increases held-by-production by a third ]]> http://www.proactiveinvestors.com.au/companies/stocktube/9735/permex-petroleum-acquisition-increases-held-by-production-by-a-third-9735.html Thu, 28 Jun 2018 09:08:00 +1000 http://www.proactiveinvestors.com.au/companies/stocktube/9735/permex-petroleum-acquisition-increases-held-by-production-by-a-third-9735.html <![CDATA[News - Permex Petroleum Corp has high hopes for oil recovery program at Bullard and West Henshaw fields ]]> http://www.proactiveinvestors.com.au/companies/news/199717/permex-petroleum-corp-has-high-hopes-for-oil-recovery-program-at-bullard-and-west-henshaw-fields-199717.html Permex Petroleum Corp (CSE: OIL) announced today that it has begun an oil well re-entry program at two of its oil fields: Bullard and West Henshaw fields. 

The goal in its re-stimulation and re-entry program is to boost production at the wells, located in west Texas, Stonewall County and south-east New Mexico, Eddy County. 

"Our approach is to target our lowest hanging fruit to increase production. In our opinion, these shut-in wells represent low cost, low risk opportunity for us to increase our current production to targeted levels," said president and chief executive officer Mehran Ehsan. 

"These re-entries fall under (Phase One) of Permex's developmental plan which is tiered towards sustainable growth. Once we have maximized output through these re-entries, we will move towards more capital-intensive programs which will provide production scale to the company, these include but are not limited to vertical and horizontal drilling."

READ: Permex Petroleum primed for production growth in the Permian basin

The company said it has hired Basic Energy Services (NYSE:BAS) to handle the re-entries and stimulation of the company wells.

The Bullard property in west Texas currently produces from the Tannehill formation at depths of 3,200 feet. The West Henshaw property is located in south-east New Mexico and currently produces from the Grayburg formation at a depth of 2,850 feet.

The stimulation and re-entry of all 33 shut-in wells that the company currently owns is expected to provide the company with an additional 150 barrels of oil in production per day. 

The company says it believes a combination of waterflooding, re-entry of all shut-in wells and infill drilling of shallow wells will yield exit rates of approximately 400 – 500 boepd for 2018.

Permex shares were up 11.9% at C$0.47 on Wednesday afternoon. 

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Wed, 27 Jun 2018 12:05:00 +1000 http://www.proactiveinvestors.com.au/companies/news/199717/permex-petroleum-corp-has-high-hopes-for-oil-recovery-program-at-bullard-and-west-henshaw-fields-199717.html
<![CDATA[Media files - Permex Petroleum to begin waterflood EOR program at Texas asset ]]> http://www.proactiveinvestors.com.au/companies/stocktube/9707/permex-petroleum-to-begin-waterflood-eor-program-at-texas-asset-9707.html Tue, 26 Jun 2018 16:01:00 +1000 http://www.proactiveinvestors.com.au/companies/stocktube/9707/permex-petroleum-to-begin-waterflood-eor-program-at-texas-asset-9707.html <![CDATA[News - Permex Petroleum primed for production growth in the Permian basin ]]> http://www.proactiveinvestors.com.au/companies/news/199428/permex-petroleum-primed-for-production-growth-in-the-permian-basin-199428.html Junior oiler Permex Petroleum Corporation (CSE:OIL) has certainly not stood still since completing its IPO in May, raising over C$4mln gross, and has been on an acquisition spree since.

The company's stated goal is simple. It will focus on assets with upside potential in Texas and New Mexico - notably in the Permian basin, a huge producing area for oil and gas.

It will acquiring producing assets at a discount, increasing production and cash-flow through recompletions and re-entries, secondary recovery (EOR enhanced oil recovery) and low cost infill drilling and development.

So what's the company got?

The oil firm has more than 5,200 net acres of held by production (HBP) oil and gas assets in  Texas and New Mexico.

There are 33 shut-in opportunities, which can be brought back online. It has over 90 oil and gas wells (46 in production) and ten salt water disposal wells. There are two water supply wells to allow for waterflood secondary recovery.

As at September last year, Permex had 2P (proved and probable) reserves independently estimated at 7.16mln barrels of oil equivalent and a net present value (NPV) of future net revenue independently estimated at US$115mln, using a 10% cut-off.

A clutch of deals..

In May, Permex unveiled a highly promising deal with venture capital group Blackspear Capital Corp on the 680-acre Oxy Yates property in New Mexico.

Blackspear will farm into leases and bear the entire cost of the drilling and completing the operations.

Permex believes that 32 locations could be drilled and completed at an estimated cost of an extremely attractive US$50,000 to US$80,000 per well.

And just days later, the group unveiled a major milestone in its development - with the strategic acquisition of two producing assets in West Texas for around US$1.95mln in cash.

Permex will become the operator at two contiguous sections for a total of 1,220 acres in Gaines county, while notably, the other major working interest partner on the field is international oil giant Occidental Petroleum Corporation (NYSE:OXY).

In total, there are 52 vertical wells, 26 of which are producers, 21 are injection wells, four are shut in wells, and one is temporarily abandoned. The field currently has gross daily production of 158 barrels of oil per day (bopd) and 13,000 cubic feet of gas per day.

Speaking to Proactive, Permex president Mehran Ehsan said the acquisition was in line with the group's "strategy to contine acquiring and developing high quality assets in the Permian basin".

"As indicated, the Permian produces over 3.4mln of oil per day and is a significant part of US domestic production" he added.

A systematic approach..

He said Permex would take a systematic approach at the asset going forward, continuing to produce barrels there but also review potential deeper targets on the property.

And this week, Permex also revealed more operational activity, saying it was to boost boost oil recovery at its Pittcock North Tannehill unit in Texas via a waterflood program.

The Pittcock field is currently benefitting from higher WTI (West  Texas Intermediate) prices.

It also unveiled on Wednesday (June 20) a further acquisition representing a 33% held-by-production increase to its New Mexico land portfolio.

It has inked a non-binding letter of intent (LOI) with Cameron Oil and Gas Co Inc to buy the rights, title and interest in the SW Henshaw Premier unit in Eddy county for US$100,000.

The deal includes a 100% working interest with an 83.91% net revenue interest in the 840 acre property, gross, which is held by production (HBP) in the Delaware Basin of New Mexico.

The unit has seven vertical wells, of which two are producing five barrels of oil per day (bopd) and holding the acreage, as well as five shut-in wells, which offer the opportunity for Permex to re-enter and put on production.

So it's been a busy time for Permex and there’s sure to be more newsflow to come. This could be one stock to watch in coming months.

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Fri, 22 Jun 2018 10:54:00 +1000 http://www.proactiveinvestors.com.au/companies/news/199428/permex-petroleum-primed-for-production-growth-in-the-permian-basin-199428.html
<![CDATA[News - Permex Petroleum set to increase presence in New Mexico with new oil unit ]]> http://www.proactiveinvestors.com.au/companies/news/199241/permex-petroleum-set-to-increase-presence-in-new-mexico-with-new-oil-unit-199241.html Junior oil producer Permex Petroleum Corporation (CSE:OIL) is set to expand its presence in the Delaware Basin of New Mexico with a new US$100,000 strategic acquisition.

It has inked a non-binding letter of intent (LOI) with Cameron Oil and Gas Co Inc to buy the rights, title and interest in the SW Henshaw Premier unit in Eddy county.

READ: Permex Petroleum Corp has high hopes for waterflood programme at Pittcock field, Texas

This comprises a 100% working interest with an 83.91% net revenue interest in the 840 acre property, gross, which is held by production (HBP) in the Delaware Basin of New Mexico.

"We are very pleased to move forward with our expansion plans in the Delaware Basin of New Mexico, where there has recently been tremendous production among a diverse mix of formations for both oil and gas," said Permex president and chief executive Mehran Ehsan.

"This is yet another strategic acquisition as it is a direct offset property of our own West Henshaw Premier Unit, which puts our ownership over 3 sections in the area.

"We look forward to consummating our acquisition and in the short term bringing online the shut-in wells while drilling new wells in the long term on the lease," he said.

The unit has a total of seven vertical wells, of which two are producing five barrels of oil per day (bopd) and holding the acreage, as well as 5 shut-in wells.

WATCH: Permex Petroleum unveils 'exciting' acquisition in Permian Basin with major oil producer

These offer the opportunity for Permex to re-enter and put on production, Permex added.

The area's geology consists of numerous formations including Wolfcamp, San Andres, Grayburg, Queen, Seven Rivers, and Yates.

The acquisition represents a 33% held-by-production increase to Permex's New Mexico land portfolio.

Permex intends to satisfy the purchase price by issuing to Cameron shares upon closing at a deemed price calculated by a 10-day VWAP.

Permex shares in Toronto added 7.5% to stand at C$0.43.

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Wed, 20 Jun 2018 09:32:00 +1000 http://www.proactiveinvestors.com.au/companies/news/199241/permex-petroleum-set-to-increase-presence-in-new-mexico-with-new-oil-unit-199241.html
<![CDATA[News - Permex Petroleum Corp has high hopes for waterflood programme at Pittcock field, Texas ]]> http://www.proactiveinvestors.com.au/companies/news/199068/permex-petroleum-corp-has-high-hopes-for-waterflood-programme-at-pittcock-field-texas-199068.html Junior oil producer Permex Petroleum Corporation (CSE:OIL) is set to boost oil recovery at its Pittcock North Tannehill unit in Texas via a waterflood programme.

Crews will be mobilised next week and the reservoir is successfully pressured up and increased oil can be recognised in five receiver wells, the work will be expanded to cover all 21 oil wells on the North and South lease.

Permex has waterflooded the field successfully before, but due to mechanical downhole issues, the maximum water injection rate only ever reached 450 barrels of water per day (bwpd), which resulted in around 45 barrels of oil in daily production (10% of total fluid produced).

The maximum available water to inject from the current water supply well on the property is 2,000 bwpd which, at the same 10% conversion rate, would imply closer to 200 barrels of oil in daily production from the field.

"We have successfully waterflooded this field in the past, so we know that we can achieve similar if not better results with this revised recovery programme," said Mehran Ehsan, the president and chief executive at Permex.

"In the past, due to the highly corrosive barium within the field, we had downhole issues such as hole in tubing on the water supply well which halted our waterflooding in the middle of our work programme.

"As such, we plan on restarting the waterflood from scratch, utilising one of the industry-leading Schlumberger ESP (Electric Submersible Pump) units this time to allow us to bypass rod or tubing issues so we can gradually increase water injection to 2,000 bwpd and recover much higher daily oil volumes."

The enhanced oil recovery programme is expected to have long term benefits to the field's production profile.

The Pittcock field produces oil which is currently benefitting from higher WTI (West  Texas Intermediate) prices.

Permex shares are at C$0.39 in Toronto.

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Mon, 18 Jun 2018 11:43:00 +1000 http://www.proactiveinvestors.com.au/companies/news/199068/permex-petroleum-corp-has-high-hopes-for-waterflood-programme-at-pittcock-field-texas-199068.html
<![CDATA[Media files - Permex Petroleum unveils 'exciting' acquisition in Permian Basin with major oil producer ]]> http://www.proactiveinvestors.com.au/companies/stocktube/9467/permex-petroleum-unveils-exciting-acquisition-in-permian-basin-with-major-oil-producer-9467.html Wed, 06 Jun 2018 08:51:00 +1000 http://www.proactiveinvestors.com.au/companies/stocktube/9467/permex-petroleum-unveils-exciting-acquisition-in-permian-basin-with-major-oil-producer-9467.html <![CDATA[News - Permex Petroleum's strategic acquisition in West Texas allows it to scale up business ]]> http://www.proactiveinvestors.com.au/companies/news/198282/permex-petroleum-s-strategic-acquisition-in-west-texas-allows-it-to-scale-up-business-198282.html Junior oiler Permex Petroleum Corporation (CSE:OIL) unveiled a major milestone in its development - with the strategic acquisition of two producing assets in West Texas for around US$1.95mln in cash.

Permex will become the operator for the property in Gaines County, while notably, the other major working interest partner on the field is international oil giant Occidental Petroleum Corporation (NYSE:OXY), which has a market cap of around US$65.19bn and is active in the Middle East and Latin America.

Permex has inked a deal for the seller's rights, title and interest in what's called the ODC San Andres Unit and the W.J. "A" Taylor lease.

In the Permian Basin ...

The property is just under two contiguous sections for a total of 1,220 acres, all held by production (HBP) in the central basin platform of the Permian Basin.

In total, there are 52 vertical wells, 26 of which are producers, 21 are injection wells, four are shut in wells, and one is temporarily abandoned. The field currently has a gross daily production of 158 barrels of oil per day (bopd) and 13 thousand cubic feet of gas per day.

Permex believes that significant additional formations below the current production zones exist.

"This acquisition represents a significant milestone for us," Mehran Ehsan, Permex president, told investors Tuesday.

"Providing us with access to a truly high-quality oil and gas field and immediate production to accelerate and execute our business plan to scale the company.

A big cap player in North America ...

"In addition, it gives us an opportunity to work side by side with one of the largest oil and gas producers in North America.

"We plan to continue operations, design a comprehensive frac re-entry program to submit to Occidental through an "Authority for Expenditure" for approval, as well as review the acreage for additional drilling into the San Andres formation as spacing allows."

Permex will take a 41.4% working interest with a 34.7% net revenue interest and an additional 0.006% overriding royalty interest with 0.21% royalty interest in the ODC San Andres Unit.

It will take on the 48% working interest with a 41.51% net revenue interest and 0.083% royalty interest in the W.J. "A" Taylor lease.

The total purchase price of around US$1.95mln in cash, includes over US$1.2mln in equipment on the field and the yard within the lease.

Offset operators to this property include Occidental Petroleum (NYSE:OXY), Devon Energy (NYSE:DVN), Hess Corporation (NYSE:HES), and Fasken Oil and Ranch.

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Tue, 05 Jun 2018 08:17:00 +1000 http://www.proactiveinvestors.com.au/companies/news/198282/permex-petroleum-s-strategic-acquisition-in-west-texas-allows-it-to-scale-up-business-198282.html
<![CDATA[Media files - Permex Petroleum announces farm-out deal on oil project in New Mexico ]]> http://www.proactiveinvestors.com.au/companies/stocktube/9405/permex-petroleum-announces-farm-out-deal-on-oil-project-in-new-mexico-9405.html Wed, 30 May 2018 13:52:00 +1000 http://www.proactiveinvestors.com.au/companies/stocktube/9405/permex-petroleum-announces-farm-out-deal-on-oil-project-in-new-mexico-9405.html <![CDATA[News - Permex Petroleum shares gush higher on Blackspear farmout deal ]]> http://www.proactiveinvestors.com.au/companies/news/197857/permex-petroleum-shares-gush-higher-on-blackspear-farmout-deal-197857.html Permex Petroleum Corporation (CSE:OIL) announced a farm-out deal with venture capital group Blackspear Capital Corp on the 680-acre Oxy Yates property in New Mexico, sending shares higher.

Blackspear will farm into leases where the Yates oil formation is said to be between 50 feet (ft) and 60 feet thick and lying at an average depth of 1,200 feet.

Permex believes that the excellent 10-acre well spacing provides the opportunity for an estimated 32 locations to be drilled and completed at an estimated cost of between US$50,000 and US$80,000 per well.

Significantly, Blackspear will bear the entire cost of the drilling and completing the operations.

"Permex Petroleum is excited to have executed the Farm-out Agreement thereby securing the relationship with Blackspear as a Venture Capital strategic partner," said Mehran Ehsan,  the president and chief executive of Permex.

"This partnership will enhance Permex's ability to drill and develop its assets without accessing debt or further accessing equity markets, thereby reducing the debt and market dilution risk and strengthening the Company's ability to perform its reserve development program in a timely fashion."

Khaleel Meghji, president of Blackspear Capital added: "We believe the Oxy Yates property is a very promising oil and gas field and that Permex Petroleum's portfolio of Texas and New Mexico acreage is among the most exciting farm-in opportunities we've evaluated in the region.

"We look forward to working closely with Permex to define and execute the drilling opportunities as quickly and economically as possible."

Upon the farmee (Blackspear) earning any income from the sale of any oil, natural gas, or other hydrocarbons, the farmor (Permex) shall retain a 25% working interest before payout in the assigned leases applicable to that particular well until farmee has recovered its costs (after payout).

Then, Permex shall retain a 50% working interest in the well.

Permex shares added 10% on the day to stand at C$0.55 each.

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Tue, 29 May 2018 13:50:00 +1000 http://www.proactiveinvestors.com.au/companies/news/197857/permex-petroleum-shares-gush-higher-on-blackspear-farmout-deal-197857.html
<![CDATA[News - Permex Petroleum raises C$4.067mln in IPO; starts trading on CSE on May 17 ]]> http://www.proactiveinvestors.com.au/companies/news/197137/permex-petroleum-raises-c4067mln-in-ipo-starts-trading-on-cse-on-may-17-197137.html Permex Petroleum Corporation (CSE:OIL) revealed it had completed its initial public offering (IPO), raising over C$4mln and shares will resume trading on the CSE tomorrow (May 17) under the symbol 'OIL'.

The oil company issued over 8.12mln shares at C$0.50 a throw for aggregate gross proceeds of C$4,067,750.

Permex has oil and gas assets in Texas and New Mexico in the US and net proceeds are expected to be used, among others, to enhance and develop existing properties by returning shut in wells to production.

The group also plans to start waterflood activities, re-entering and stimulating well candidates that indicate the most potential for production, infill drill shallow fields and buy more assets, it said.

The offering was made via a syndicate of agents led by Canaccord Genuity and included Gravitas Securities Inc.

They have received a cash commission equal to 8% of the gross proceeds, an aggregate of 203,387 shares representing shares issuable pursuant to the agents' 2.5% corporate finance fee and warrants exercisable to acquire up to 650,840 Permex shares for $0.50 per share until May 16, 2021.

Upon the start of trading, it is anticipated that Permex will have over 35.66mln issued and outstanding common shares.

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Wed, 16 May 2018 15:11:00 +1000 http://www.proactiveinvestors.com.au/companies/news/197137/permex-petroleum-raises-c4067mln-in-ipo-starts-trading-on-cse-on-may-17-197137.html
<![CDATA[Media files - Permex Petroleum CEO confident shareholders will 'reap the benefit' of planned IPO ]]> http://www.proactiveinvestors.com.au/companies/stocktube/9194/permex-petroleum-ceo-confident-shareholders-will-reap-the-benefit-of-planned-ipo-9194.html Wed, 02 May 2018 09:18:00 +1000 http://www.proactiveinvestors.com.au/companies/stocktube/9194/permex-petroleum-ceo-confident-shareholders-will-reap-the-benefit-of-planned-ipo-9194.html <![CDATA[News - Permex Petroleum Corp files final prospectus; launches initial public offering ]]> http://www.proactiveinvestors.com.au/companies/news/192879/permex-petroleum-corp-files-final-prospectus-launches-initial-public-offering-192879.html Permex Petroleum Corporation (CSE:OIL) said it had filed a final prospectus as it launched its planned initial public offering (IPO).

The offering consists of a minimum of 5mln shares at 50 cents each for gross proceeds of C$2.5mln and a maximum of 20mln shares for gross proceeds of C$10mln.

The offer is being made via a syndicate of agents led by Canaccord Genuity and including Gravitas Securities Inc.

There is an over-allotment option for the agents for 60 days after closing to buy up to a further number of shares equal to 15% of the shares offered at 50 cents.

Additional gross proceeds of C$1.5mln will be raised if the over-allotment option is exercised in full.

Closing of the offering is expected to occur on or about April 6 this year, when the offered shares are expected to commence trading on the Canadian Securities Exchange (CSE) under the symbol 'OIL'.

The firm made the caveat that there can be no assurance that the offering will be completed.

Permex Petroleum describes itself as a uniquely positioned junior oil  and gas company with assets and operations across the Permian Basin of west Texas and the Delaware Sub-Basin of south east New Mexico.

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Thu, 08 Mar 2018 15:43:00 +1100 http://www.proactiveinvestors.com.au/companies/news/192879/permex-petroleum-corp-files-final-prospectus-launches-initial-public-offering-192879.html
<![CDATA[News - Permex Petroleum files preliminary prospectus relating to planned IPO ]]> http://www.proactiveinvestors.com.au/companies/news/189608/permex-petroleum-files-preliminary-prospectus-relating-to-planned-ipo-189608.html Junior oil and gas company Permex Petroleum Corporation has filed a preliminary prospectus relating to a planned initial public offering (IPO).

The offering consists of a minimum of 5mln shares at 50 cents a share to raise C$2.5mln (gross) and a maximum of 20mln shares to raise C$10mln (gross).

The offering has not been underwritten. The company has granted an over-allotment option to Canaccord Genuity and Gravitas Securities that could see the maximum amount raised rise to C$11.5mln before agents' fees.

The company's primary business is to directly or indirectly acquire, hold, manage, operate and sell oil and gas properties in North America.

More specifically, the company seeks to acquire, enhance and, if warranted, develop working interests in producing crude oil and natural gas properties and developmental drilling locations in existing wells with proved reserves that need to be refurbished or re-drilled in order to be returned to production.

The bulk of the money raised by the flotation (should it go ahead) has been earmarked for the enhancement and development of Permex's existing oil and gas properties, but according to the company's prospectus, if it raises the maximum amount from the IPO it will set aside C$2.5mln for the purchase of additional properties.

The company's current properties are all based in Texas or neighboring New Mexico. The Mary Bullard, Pittcock North & South properties are situated in Stonewall County; the Peavy property is in Young County in the Permian basin; the McMurtry and Loving Properties are located on the boundary between Jack and Young counties in Texas; the West Henshaw and Oxy Yates Properties are located in Eddy County, New Mexico in the Delaware basin.

The company also holds a 100% working interest and a 78.9% net revenue interest in the Windy Jones property, the sole purpose of which is to provide water-flood to the offset wells, namely the Pittcock wells located on the east boundary of the Windy Jones Property.

As of the end of September 2017, the company's estimated proved reserves of light and medium oil totaled 2,450mln barrels (net), while proved plus probable reserves clocked in at 5.88mln barrels.

Total proved reserves of natural gas were put at 252mln cubic feet, while proved plus probable reserves were put at 7.71mln cubic feet.

The company anticipates beginning its program to bring all shut-in wells to production and its planned water-flood activities, as well as initially drilling one proved undeveloped well in the Yates formation on the Oxy Yates property in the first quarter of 2018 with the use of proceeds from the offering.

The anticipated cost of drilling the initial well in the Yates formation is roughly US$45,000 - US$75,000. After the initial results of these activities are known by Permex it plans to evaluate other drilling opportunities of a similar cost that it has identified on the Oxy Yates property; this is expected to occur in the second quarter of 2018.

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Fri, 05 Jan 2018 18:34:00 +1100 http://www.proactiveinvestors.com.au/companies/news/189608/permex-petroleum-files-preliminary-prospectus-relating-to-planned-ipo-189608.html