- 01$2.02m offer: 5-for-1 at 1.1c, with free options.
- 02Funds Odin/Vali wells, Thaldra exploration and Odin connection.
- 03Up to $1m underwriting may offset debt.
Metgasco Limited (ASX: MEL) has launched a partially underwritten entitlement offer targeting up to $2.02 million to support gas field development and working capital in the Cooper Basin.
The renounceable raising offers eligible shareholders five new shares for every existing share at 1.1 cents apiece, with one free attaching option for each new share.
Lead manager PAC Partners will underwrite up to $1m, although a linked debt set-off arrangement means the underwritten portion may reduce borrowings rather than deliver fresh cash.
Proceeds available in cash are intended primarily for planning new wells at Odin and Vali, oil exploration at Thaldra, and a permanent connection at the Odin gas field.
Offer Structure and Debt Conversion
The offer could issue approximately 183.7 million new shares, with attached options exercisable at 1.7 cents within three years of their issue.
Glennon Small Companies (ASX: GC1), an existing substantial shareholder associated with Metgasco director Michael Glennon, has agreed to sub-underwrite up to the full $1m commitment.
Any subscription by Glennon Small Companies under that arrangement will be settled through an equivalent reduction in Metgasco debt, not a cash payment to the producer.
The ownership consequences are material: Glennon’s relevant interest, currently about 20%, could range from 3.33% to 76.97% under the alternative subscription and sub-underwriting scenarios outlined.
Funding for Producing Fields
Under an illustrative fully cash-funded offer, Metgasco allocates $300,000 to the Odin permanent connection, $1.481m to working capital and well planning, and $239,000 to raising costs.
Metgasco holds non-operated 25% interests in both the Odin and Vali gas fields, where production is connected to the Moomba infrastructure network.
The planned Odin connection would replace rented equipment and is estimated to save the joint venture around $700,000 annually, subject to installation and operating outcomes.
Proposed Odin-3 and Vali-4 gas wells are supported by South Australian government grants totalling $5m, covering up to half their drilling costs, subject to relevant conditions.
An independent assessment effective 30 June 2026 attributed 6.2 petajoules equivalent (PJe) of proved plus probable reserves and 31.45PJe of contingent resources to its interests.
Subscription Timetable
Eligible holdings will be determined at 7pm Australian Eastern Standard Time on 13 November, with the offer scheduled to open on 17 November and close on 1 December.
Shareholders taking up their full entitlement may apply for additional shares, while renounceable entitlements can be traded or transferred during the specified trading window.
The capital raising is intended to improve financial flexibility, but the company identifies going-concern uncertainty, reliance on joint venture partners, and development execution as continuing risks.
New asset discussions remain non-binding, and neither successful drilling nor the conversion of contingent resources into reserves is assured by the proposed funding.
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