AUSTRALIA based Tap Oil has executed an Amended Facility Agreement with BNP Paribas and Siam Commercial Bank (BNP Facility) and plans to raise US$5 million in capital.

Tap’s current outstanding balance of the BNP Facility is US$25 million.

At current oil prices, Tap expects the outstanding balance of the BNP Facility at 31 December 2016 to be US$9 million and the cash position to be about US$7 million.

The agreement outlines Tap has hedged about 700,000 barrels of forecast Manora production from April 2016 to February 2017 at an average swap price of US$42.15 barrels, representing about 47.5 per cent of forecast volumes over the 11 month period.

In addition Tap is attempting to raise a minimum of US$5 million in additional capital through a pro rata renounceable rights issue of fully paid ordinary shares in the company for up to A$7.75 million (before costs).

With regards to the company’s Thailand assets, Tap’s board has approved the company’s participation in the Sri Trang 1 exploration well in the reservation area of the G1/48 concession in the Northern Gulf of Thailand.

The Sri Trang 1 about 18 kilometres north northeast of the Manora oil development.

Mubadala Petroleum, operator of the G1/48 reservation area concession, has advised that the Atwood Orca jackup rig is currently expected to commence drilling Sri Trang 1 in mid-May 2016.

The well objective is to evaluate the primary Middle Miocene lacustrine sands target with secondary targets of Late Miocene fluvial sands, Tap said.

The Middle Miocene lacustrine sands target is the main reservoir level at the Manora oilfield.

Tap said testing of the primary objective Middle Miocene sands is essential as it will validate the hydrocarbon prospectivity of the Northern Kra basin and de-risk dependent prospects immediately to the west of Sri Trang 1.

The well is being drilled to around 2,590 metres measured depth and is expected to take ten days on a trouble free dry hole basis.

The outcome of the well will determine any likely development scenario, including the possibility of a production platform tied back to the Manora production facility.

The drilling cost of the Sri Trang 1 well will be offset against the G1/48 reservation area fee of US$3.8 million paid to the department of mineral fuels (DMF) by the joint venture.

Providing the well comes in on budget, Tap will not be required to contribute any further cash for the well, with Tap’s share of the expected well cost US$1.02 million.