MEO Australia Ltd (ASX:MEO) has accepted commitments to raise about $1.69 million via the placement of shares at $0.036 each, to progress its oil exploration activities in northern Cuba.
A number of existing shareholders showed support for the placement and the company has welcomed a number of new investors to its share register.
The proceeds from the placement will be used to accelerate MEO’s onshore exploration activities on Block 9 in Cuba, including the preparation of a drilling program for up to two wells in Block 9.
Block 9 is a large onshore petroleum exploration block which is about 588,000 acres, located in northern Cuba.
It is situated in an untapped region of the Gulf of Mexico, which is one of the world’s largest petroleum mega provinces.
Critically, the United States Geological Survey estimates that the total undiscovered, technically recoverable oil in the North Cuba basin, where Block 9 is located, is 4.6 billion barrels.
MEO expects to complete the preliminary stage of Block 9 assessment in the fourth quarter of 2016.
The company had executed the Block 9 production sharing contract with the national oil company Cuba Petróleo Union in 2015.
Subject to receiving a waiver from the ASX listing rules in relation to the offer price, MEO will also provide an opportunity for eligible shareholders to acquire new shares at $0.036.
The company is targeting to raise about $1 million through the share purchase plan.
MEO’s cash balance as at 30 June 2016 was $4.1 million.
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