AusTex Oil (ASX: AOK) is focused on reworking and development of oil and gas leases in the U.S.
AusTex Oil raises US$6m for development of U.S. oil and gas assets
AusTex Oil (ASX: AOK) has raised US$6 million through a private placement of 60 million shares at A$0.10 each, along with 30 million free options with an exercise price of A$0.15 each with a three year expiry date from issue.
The private placement is to a group of New York based sophisticated and professional investors to fund the continued development of its producing oil and gas assets in Oklahoma and Kansas.
The assets include the company's significant acreage position in the Mississippi Lime play, one of the most attractive new horizontal oil plays in North America.
Importantly, AusTex has established a strong initial land position in what is considered to be the heart of the play in Kay and Noble counties.
The placement represents another strategic milestone for the company as its goal was to attract US based investors in the lead up to AusTex’s proposed North American listing.
The private placement was lead by specialist oil and gas investor Iroquois Capital Opportunity (ICO) Fund, LP.
Daniel Lanskey, AusTex's managing director, said "we are very pleased to have the support of Iroquois Capital Opportunity Fund.
"Their involvement validates the potential of the company and the underlying value of our portfolio of oil and gas assets. We are very excited about the team of people now in place and this injection of capital will expedite the development of our properties.”
The agreement for the placement was finalised on Thursday 16 June and is subject to shareholder approval at an extraordinary general meeting of shareholders to be held shortly.
US$2.2million will be raised in the meantime by way of promissory notes that compulsorily convert to fully paid ordinary shares and options upon shareholder approval.
The additional $US3.8 million will be received upon shareholder approval of the placement.
In order to expedite oil and gas development AusTex has appointed an additional senior production engineer and a new senior geologist to its U.S. based technical team.
Tulsa-based consulting engineers Plaster and Wald have been retained to design drilling and completion of horizontal wells.
The company has also signed a one year mandate with Iromad LLC, a specialised oil and gas consultancy to provide ongoing technical and operational expertise.
Iromad has been working with AusTex Oil to optimise production from existing wells and infrastructure as well as providing input into the upcoming work program.
