The Board of Austin Exploration has announced that it has resolved to complete a two-tranche Placement of its securities to raise AUS$1.7million to fast track its drilling programme at the company’s 100% owned 15 282 acre Pathfinder project in Colorado. This injection of capital follow’s the companies recent success where drilling intersected a 790 ft column of oil in the Pierre formation. Significantly, this proved this presence of oil in the Pierre formation to the west of the Florence field which has produced more than 15 million bbls.
The AUS$1.7 million Placement, which had strong demand, has been priced at 0.7c which represents a 75% increase to the Company’s Rights issue that was completed in May. The placement will see 200 million shares issued and be completed in two tranches. Paterson’s Securities Limited is acting as lead manager for the Placement.
The issue of the new placement shares under tranche 1 is scheduled for 17 June 2016 will fall within the company's placement capacity pursuant to ASX Listing Rule 7.1 and 7.1A. The Company will call for a general meeting of shareholders shortly to approve the issue of the tranche 2 placement shares by subsequently approving the 17 June 2016 issue. This is expected to be held in mid July 2016.
Preparations to drill two back-to-back wells are advancing with drilling operations to recommence this month. The company will announce material results of the drilling as they occur. Flow testing of the three wells is expected to take place following completion of the drilling programme. This sequential three well programme has been designed to maximise operational and drilling efficiencies, minimise costs and maximise production potential.
Austin’s recent discovery in the Pierre proved that the company’s methodical de-risking programme in section 18 of the property was successful in identifying natural fractures in the Pierre formation that are filled with crude oil. The company applied a combination of state-of-the art 3D seismic technology, surface geochemistry studies, satellite imagery studies and exploration drilling. This programme identified several high-impact drilling targets.
The capital raised from this Placement will be allocated to drilling two more high impact targets that the company has identified through this highly advanced exploration programme.
Through the company’s strategic drill rig fleet rental agreement with Math Energy Drilling, coupled with the company’s internal management of its operations, the company can drill and complete a Pierre well for approximately US$500 000 which represents a 50% reduction in costs for what similar wells have been drilled for in the same area.
Austin’s current 15 282 acreage position is large enough to accommodate at least 350 wells and the Company is encouraged by the success of the Magellan#1 well and the potential that it has uncovered for the future of this project.
Austin’s CEO and MD Guy Goudy commented:
“It is clear from the Magellan #1 discovery that Pathfinder could be a project of significant scale and value, and it is prudent that we undertake a more extensive exploration and development programme that unlocks the value of this field more fully. “Our focus now is drilling the next two wells in quick succession then moving to flow testing on all three wells. With the potential for approximately 350 wells at Pathfinder, AKK’s true value is only just being realised.”
Material results will be communicated to the market as they occur.
Adapted from a press release by Louise Mulhall
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/10062016/austin-raises-aus17-million-to-fast-track-high-impact-drilling-programme/