Real Energy raises $5m to advance Windorah gas project
Real Energy has secured additional funds to progress development of Windorah.
Oil and gas explorer Real Energy (ASX: RLE) has raised $5 million via a placement to help advance its Windorah gas project in Queensland towards production.
The raising was completed through the issue of about 47.6 million new shares at $0.10 per share and about 15.8 million attaching listed RLEOB options, exercisable at $0.14.
The Cooper Basin-focused company said the placement was well-supported by new and existing sophisticated and professional investors, together with a handful of Australian and international institutional investors.
Settlement of the placement, which was managed by Hartleys and Xcel Capital, is expected to take place on 8 March.
Funds raised from the placement will be used for ongoing testing and field work on the company’s Tamarama-1, Tamarama-2 and Tamarama-3 gas wells.
The additional capital will also ensure Real Energy is well-funded to continue progressing pre-construction works for the pipeline to the Santos-operated (ASX: STO) Mt Howitt gas gathering facility, updating the reserve/resource assessment for Windorah and advancing gas offtake agreements.
In addition, Real Energy said the raising would assist it to secure funding on favourable terms for the pipeline build and/or securing a potential farm-out.
The company has already acted quickly in moving ahead with its commercialisation plans, having submitted an application for the pipeline licence connecting its Tamarama wells and the Mt Howitt gas gathering facility earlier this year.
If approved, the pipeline would enable Real Energy to feed its raw gas into an existing gas gathering and processing system located just 14 kilometres away from the gas field. The gas will then be processed into sales gas at Moomba for distribution to the east coast market.
Windorah gas project
The Windorah gas resources are located in Real Energy’s wholly-owned exploration permit ATP 927P.
The company is of the view that the asset has the potential to be a large gas field that could make a significant contribution to the eastern states gas markets.
“The company has made considerable progress with our project in recent months and we are looking to advance the project to production,” Real Energy managing director Scott Brown said.
“The strong support for this placement is a testament to both the quality and potential of the Windorah gas project and we are grateful for the support shown from our existing shareholders and are pleased to welcome a number of high-quality institutional investors to our register.”
Shedding light on the RLEOA options, Real Energy said it had sought an extension on the 15 April expiry of the listed options.
The extension, which will be subject to ASX and shareholder approvals, is considered important for the company, with the proceeds from the exercise of the options to be used in conjunction with current proceeds as it progresses towards production.
Real Energy’s shares dropped 20.7% in morning trade to $0.107.