Subiaco-based oil and gas explorer Red Fork Energy Ltd has announced plans to raise $10 million through a placement to fast track production at its Oklahoma assets.
Subiaco-based oil and gas explorer Red Fork Energy Ltd has announced plans to raise $10 million through a placement to fast track production at its Oklahoma assets.
The full text of a company announcement is pasted below
Australian based oil & gas company, Red Fork Energy Limited ("Red Fork" or "the Company") plans to fast track production at its Oklahoma (United States) oil & gas assets following a A$10 million placement to international and domestic institutional and sophisticated investor clients of Australian broker Hartleys Limited.
Under the terms of the Placement, Red Fork has resolved to place up to 18,500,000 ordinary shares at an issue price of A$0.55 per share, to raise up to A$10,175,000 ("the Placement").
The Placement will be made in two tranches, with 7.9 million shares issued pursuant to the Company's ASX Listing Rule 7.1 15% placement capacity, and the balance of 10.6 million shares issued subject to shareholder approval at a general meeting of shareholders scheduled to be held on or around 28 December 2007.
As a result of this Placement Red Fork is now fully funded to pursue the ongoing development of its rapidly growing coal bed methane, unconventional gas, and conventional oil and gas holdings in Oklahoma, in the United States, with:
- Production growing, with the first milestone of 1MMcfe/d achieved;
- Independently certified initial 2P reserves of 36.4Bcfe;
- Landholding secured and 100% owned, with long lease terms in established basins; and
- Experienced United States based operational management team.
The funds raised will be applied to an aggressive drilling program, expansion of the Company's existing pipeline infrastructure as well as additional leasing in key strategic areas.
The work program over the next 24 months is targeted to increase Red Fork's production to in excess of 6.0MMcfe/day generating net revenue of A$18 million per annum, coincident with a targeted increase in total reserves to approximately 150Bcfe.
David Prentice, Managing Director of Red Fork stated:
"This Placement has not only provided the funding for our aggressive development program in Oklahoma, but also introduced to our register a number of committed Australian and international institutional and sophisticated investors - individuals and groups who we feel will become important partners as the company continues its development."
Red Fork currently has 34,000 acres leased in Oklahoma (targeting 50,000 acres from its ongoing leasing campaign) with long lease terms and high net revenue interests. The company has established a very strong technical team based in its office in Tulsa (with access to experienced drilling contractors and service companies with demonstrated successful trackrecords) and has built and acquired significant pipeline, compression and gathering
infrastructure.
