CARBON Energy has launched a share purchase plan (SPP) to raise up to $5 million, with the capital to be used to advance its Blue Gum Gas Project in Queensland.

Patersons Securities has been appointed lead manager and will underwrite $2.5 million of the SPP.

Carbon has invited eligible shareholders to participate by purchasing up to $15,000 of company shares at 5c per share.

Funds raised will be applied to the closing out of the government’s underground coal gasification review process, commencement of work on the Blue Gum Gas Project near Darby, the pursuit of offtake and/or investment partners in the project, further business development and general working capital.

“These funds will provide some of the initial capital required to advance the commercialisation of the Blue Gum Gas Project,” Carbon Energy managing director Morné Engelbrecht said.

“The Blue Gum Gas Project has the potential to generate significant financial returns for the company as well as generate numerous jobs and revenue for the state of Queensland and we look forward to continuing to work with the State Government to make this significant project a reality.”

Carbon Energy holds the fifth largest proved and probable gas reserves in Queensland, boasting 1,128 petajoules of natural gas equivalent, equating to 188 million barrels of oil.

The company has been hard at work building a gas business in Queensland, proving its credentials of its our keyseam underground coal gasification (UCG) technology

Carbon Energy is now in the process of satisfying the final pre-conditions to the development of the Blue Gum Gas Project.

The SPP closed on 23 October, with shares to be quoted on 4 November.