Vintage Energy to use new funding to boost supply of gas to east coast
Vintage Energy’s (ASX: VEN) run of good news has continued with the company’s successful finalisation of the institutional component of an approximately $5.6 million capital raising.
The execution of the institutional component successfully raised approximately $3 million through a $2 million private placement and an approximately $1 million fully underwritten accelerated non-renounceable entitlement offer.
Existing shareholders were assigned participation in the institutional capital raise.
MST Financial Services & Taylor Collison acted as joint lead managers to the placement and are acting as Joint underwriters to the entitlement offer.
Meanwhile, the company is preparing to undertake a fully underwritten retail entitlement offer to raise approximately $2.6 million, which is scheduled open on June 7.
Gas plans boosted by new funding
The new funds will be utilised on Vintage’s plans to accelerate production at the company’s Cooper Basin Vali and Odin fields which are supplying key natural gas to the east coast energy market.
“We are highly appreciative of the affirmation given by institutional shareholders to the opportunity Vintage has before it,” said Vintage managing director Neil Gibbins.
“Through this raising, we expect to realise significant increases in our supply of gas to eastern Australia and, in turn, our revenue and cash flow generation. Our work program for the coming months is to take the Vali gas field from one to three producing wells and bring the Odin gas field online to supply gas to our new contract with Pelican Point Power Limited.”
The company is developing a two-field, two-contract gas strategy and has further upside available.
“Our prospects for taking the growth further are excellent: interest from domestic gas buyers has never been stronger; we have uncontracted gas and last week’s authorisation from the ACCC has opened the door for longer term joint marketing of supply from Odin,” Mr Gibbins added.
Vintage’s growth strategy takes advantages of its status as a small producer supplying gas into the domestic market, which the company believes are likely to deem it exempt from new gas price measures proposed by the Federal Government in a draft Gas Mandatory Code of Conduct.
Strong news flow continues
In recent months Vintage Energy has been able to report a number of positive breakthroughs, including first gas production from the Vali field and the signing of an additional gas contract that will bring a second field, Odin, online later this year.
The company and its joint venture partners also recently celebrated Australian Competition and Consumer Commission (ACCC) approval for joint marketing of gas from Odin.