Karoon raises A$150m in placement
KALGOORLIE (miningweekly.com) – Oil and gas explorer Karoon Gas has raised some A$150-million through an institutional placement to fund its current drilling programme and support rig contract negotiations.
The placement was conducted at an offer price of A$5.10 a share, which Karoon said represented an 8.9% discount to the company’s last closing price of A$5.60 a share.
“The placement received very strong interest from new and existing investors who recognise value in Karoon’s global portfolio of assets and is an indication on the level of confidence that the company will continue to deliver further exploration and appraisal success in Australia, Brazil and Peru,” said Karoon executive chairperson Robert Hosking.
Following the placement, the company had A$320-million in cash and remained debt free.
The company said the placement would strengthen the balance sheet, allowing for the financial flexibility to achieve the best outcome on current farm-out negotiations as well as to support Karoon’s position for rig contract negotiations and the buying of long-lead items necessary for entering into new drilling programmes before the farm-out. This would allow the company to progress its drill planning and start drill programmes on schedule.
The funding would also facilitate continued drilling activity in the Australian Browse basin and the Brazilian Santos basin, as well as provide support for new drilling in Peru.
Karoon noted that the company would also offer eligible shareholders the opportunity to subscribe for up to A$15 000 in additional shares under a share purchase plan.
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