IPB Petroleum ups ante with $3M raise for Browse Basin permits
IPB Petroleum (ASX: IPB)
has raised $3 million through an oversubscribed share placement to
continue its studies in three oil and gas exploration permits in the
Browse Basin offshore northwest Australia.
The company had placed 11.1 million shares priced at $0.27 each to institutional and sophisticated investors.
Morgans Corporate and Sanston Securities were Joint Lead Managers for the placement, which received very strong interest from local and overseas institutional investors as well as new and existing sophisticated investors.
Funds raised from the placement will also be used to pursue new ventures and for general working capital.
“We are very pleased with the overwhelming interest received in this Placement. The new additional funding is expected to strengthen the company’s capital base ahead of a very important year for IPB Petroleum,” managing director Brendan Brown said.
IPB expects the highly anticipated Pryderi-1 exploration well in WA-424-P offshore northwestern Australia, which targets Mean Prospective Resources of 40 million barrels of oil, to spud in the first quarter of 2014.
Its share of costs will be free carried by CalEnergy, a fully-owned subsidiary of Berkshire Hathaway’s MidAmerican Energy Holdings Company. IPB has a 75% interest while CalEnergy holds 25%.
IPB Petroleum holds three adjacent Browse Basin permits, WA-424-P (IPB 75%), WA-485-P (IPB 100%), and WA-471-P (IPB 100%) that together host net mean Prospective Recoverable Resources of 672 million barrels of oil in what is believed to be a new oil fairway along the southern margin of the basin.
This concept will be tested when the Pryderi-1 exploration well spuds next year.
The Pryderi prospect is around 5 kilometres away from Gwydion-1, which was drilled by BHP Petroleum in 1995 and had encountered a 14.5 metre gas column in poor quality glauconitic sand above a 10 metre oil column in good quality clean sand.
It is deemed to have a 75% chance of hydrocarbon discovery with 60% chance of this being oil, or an overall 45% chance of an oil discovery.
A success at Pryderi will open up this oil province.
Other notable points about the company’s permits include their shallow water depth of about 80 metres and shallow target reservoirs averaging about 700 metres in depth which translate to lower exploration costs.
The prospectivity of IPB Petroleum’s Browse Basin exploration permits and the upcoming Pryderi-1 well are clearly recognised by institutional and sophisticated investors, who have demonstrated their support by oversubscribing for its $3 million share placement.
Investors will also be closely watching the Pryderi-1 well, which will be drilled at no cost to IPB.
If successful, this will unlock the oil potential of the company’s permits and significantly re-rate its shares.
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