BURU Energy has raised $28 million in a placement and has welcomed Coogee Chemicals as a substantial investor after the company subscribed to $20 million of the share placement.
The placement, whereby some 37.3 million shares were issued at an issue price of 75c a share, represented 12.5 per cent of Buru’s equity.
In addition, Buru will undertake a share purchase plan, enabling eligible shareholders to acquire up to $15,000 of new shares at the same issue price to raise a maximum of $12 million.
Funds from the raising will be used to fund Buru’s 2015 work program centred in Western Australia’s Canning basin as well as for general corporate purposes.
Perth-based Coogee Chemicals is a private company which manufactures and distributes a wide range of industrial, agricultural and mineral processing chemicals into both Australian and international markets.
The company is currently investigating the development of a gas-to-methanol plant in northwest WA, with Buru to work with Coogee Chemicals to determine whether the proposed plant could be supplied with gas produced from Buru’s Laurel Formation basin-centred tight wet gas project.
Buru executive chairman Eric Streitberg said Coogee Chemicals had demonstrated the ability to add significant value to oil and gas investments and was delighted to have them on its share register.
“The support of our existing major shareholders is also very welcome and we look forward to working closely with all of them to drive the future success of the company,” he said.
“Our strengthened balance sheet will now allow us to pursue the substantial development opportunities which we have before us with confidence and determination.”
“The recent restructuring of the company’s management and our focus on strict cost controls will also ensure that we are able to deliver short and long term value for shareholders.”
Buru’s 2015 work program remains subject to the successful completion of the remaining 2014 work program and on receipt of relevant approvals.
Granted all goes to plan, the 2015 work program will involve the acquisition of further prospect oriented seismic data; further development of the Ungani oilfield; the upgrade of the Ungani production facilities; the drilling of at least four oil and gas exploration wells and the frac and flow test of up to four wells to determine the flow characteristics of the Laurel Formation tight wet gas accumulation.
Buru will also continue to progress discussions in relation to the potential farmout and future funding of the Laurel wet gas commercialisation project
Macquarie Capital Australia acted as lead manager to the placement.