Pura Vida Energy (ASX: PVD) has secured a binding agreement with UK-based Gemini Resources to earn a 35% stake in two Polish-based onshore oil and gas projects.
Under the agreement, Pura Vida can earn the 35% interest in Nowa Sol and Gora projects by spending $6.5 million.
Of that, Pura Vida will spend $3.9 million on a two-stage proppant fracture stimulation and flow test of the Siciny-2 well at Gora and $2.25 million on a similar test at the Jany-C1 well at Nowa Sol.
About $45 million has been spent on exploring the projects including 3D seismic and four wells, with two unconventional resources and numerous conventional plays identified.
Pura Vida will also pay a €250,000 (A$400,870) exclusivity fee to Gemini Resources to ensure its right to earn the 35% interest in the assets.
Placement and entitlement offer to fund work commitments
To fund its work commitments, Pura Vida is undertaking a placement of 55.55 million shares at $0.018 to raise $1 million before costs.
In conjunction with the placement, Pura Vida has announced a non-renouncement entitlement offer of 151.7 shares to holders on a 1:2 basis and an issue price of $0.018 per share to raise $2.73 million.
In addition to the proceeds from the placement and entitlement offer, Pura Vida has $6.7 million in cash, which will be drawn on for the work program and working capital needs.
According to Pura Vida, the fully funded work program will begin immediately once the acquisition has been finalised.
As part of the transaction, Dr Andrew Matharu will join Pura Vida’s board as an executive director and Christopher Lewis will step up as the company’s technical director.
At the Gora concession, Pura Vida will be targeting the 2C contingent resource of 1.6 trillion cubic feet of gas – around 270 million barrels of oil equivalent.
The contingent resources are associated with a 1,460m thick section of tight Carboniferous sand-shale strata which was penetrated by the Siciny-2 well.
While drilling Siciny-2, consistent good gas shows were seen throughout.
This target has been given a 42% commercial chance of success, with Pura Vida’s work program at Siciny-2 due for completion in the current quarter.
Nowa Sol concession
Meanwhile, at the Nowa Sol asset, Pura Vida is targeting 2C contingent resources of 36MMbbl of oil within the tight Zechstein Dolomite formation, with the work program scheduled for completion in the December quarter.
During drilling at Jany-C1 good oil shows were encountered in the Dolomite formation.
Pura Vida noted a successful stimulation of the well could prove a new resource play at Nowa Sol.
Nowa Sol has been given 28% commercial chance of success.
By midday, shares in Pura Vida were up almost 65% to $0.028.