STRIKE Energy Limited has completed a share placement raising approximately $12 million.

The placement followed the May 29 announcement of the grant of an option to CSBP Limited, a significant Western Australian industrial gas user, for up to 100PJ of gas from West Erregulla contingent on the success of the drilling at West Erregulla in the Perth Basin. CSBP is to pay Strike $5 million for the grant of the contingent option.

With the placement proceeds and the Option fee, Strike says it is now fully funded for the drilling and completion of the West Erregulla-2 well, on track to spud on 31 May 2019, and the continuation of the Jaws Project pilot test.

Strike’s managing sirector, Stuart Nicholls said the strong support for thr capital raising, together with the securing of a significant Western Australian industrial gas user as a potential customer, is an endorsement of Strike’s asset portfolio and significant news flow anticipated to come from West Erregulla 2 and the Jaws appraisal wells.

“Should Strike have positive results at either or both projects, the company is likely to take the transformational step required to becoming a true mid-cap natural gas company in Australia.

“The next 60 to 90 days will be pivotal in the company’s history and we look forward to rewarding all shareholders, old and new for their long-term support”.

The company will issue approximately 184,615,385 fully paid ordinary shares at $0.065 per share to professional and sophisticated investors, including approximately 4.6 million

The capital raised will be used to fund:

  • drilling and completion of the West Erregulla-2 well;
  • ongoing operation of the Jaws Project pilot test;
  • repayment of the remaining CBA facility;
  • seismic preparation activities across the company’s Southern Cooper Basin and other Perth Basin 
projects, with the objective of re-loading Strike’s prospect funnel; and
  • general working capital. 
Petra Capital acted as Lead Manager for the Placement.