AUSTRALIAN company Bass Strait Oil has raised $1 million through the pro-rata rights issue of over 201 million shares at at an issue price of $0.005 each.

The shares were issued to existing shareholders on the basis of one new share for every three ordinary shares held.

Existing shareholders subscribed for 127.8 million shares under the deal, raising about $639,170 for the company.

The remaining 73.3 million shares were taken up by Merchant Corporate Finance, which had fully underwritten the offer.

Funds raised will be used to strengthen the company’s financial position and to cover forecast project expenditure and general working capital requirements, Bass said.

The company’s statement outlined the net proceeds of the entitlement offer will be used to fund the interpretation of the newly reprocessed 3D seismic data obtained in respect of its existing Gippsland basin exploration interests and the undertaking of geological and geophysical studies in connection with those interests.

Opportunities to acquire additional interests in prospective oil and gas projects and meeting its general working capital requirements will also be funded by the net proceeds of the entitlement offer, Bass said.

The company’s directors participated for their entitlement in the rights issue along with the company’s largest shareholder, Cooper Energy.

Cooper had agreed to sub-underwrite any shortfall to a maximum of 20 million new shares, Bass said.

Bass Strait Oil executive director Tino Guglielmo said the company was delighted to receive such support from its largest shareholders in this raising.

“[We] see this as a clear indication of support for our existing asset base and the strategic direction being pursued by the company,” he said.