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- Oilex (OEX) has arranged a capital raising to fund the acquisition of a 55 per cent participating interest in the Cambay PSC from the Gujarat State Petroleum Corporation (GSPC)
- The company will issue over one billion new ordinary shares to raise about £2.4 million (approximately A$4.31 million)
- The proceeds will go towards the A$2.83 million interest acquisition, as well as development of a drilling program at Cambay
- The company’s two capital raise tranches should both be completed by the end of May 2021
- Oilex is up 20 per cent and trading at 0.6 cents per share
Oilex (OEX) has arranged a capital raising to fund the acquisition of a 55 per cent participating interest in the Cambay PSC from the Gujarat State Petroleum Corporation (GSPC).
The company intends to raise approximately £2.4 million (approximately A$4.31 million) through the equity capital raising. Oilex will issue a total of 1,008,403,361 new ordinary shares, at £0.00238 (about A$0.00425) per share across two tranches.
The company will issue 405 million of the ordinary shares in the first tranche, which is expected to reach completion in early May 2021. The remaining 603,403,361 ordinary shares will be issued in the second tranche, which should complete in late May 2021.
Oilex’s Managing Director, Joe Salomon, commented on the company’s capital raise, and what the proceeds will be used for.
“Oilex is very pleased to have received strong financial support from its long-term shareholders to complete the acquisition of GSPC’s interest in Cambay,” he said.
“The proceeds will be applied firstly for the purchase of GSPC’s 55 per cent PI and secondly to support the development of Oilex’s plans to undertake a drilling and testing appraisal program aimed directly at establishing gas flow rates from the known gas resource in the EP-IV formation in the Cambay PSC,” he added.
After the US$2.2 million (A$2.83 million) transaction for GSPC’s participating interest is completed, Oilex will hold a 100 per cent participating interest in the Cambay PSC. This will allow Oilex to restart field work at the site in India, subject to the company sourcing additional funding.
The long-term goal of the Cambay project is to confirm high gas rate production, which can be eventually sold into India’s high-pressure pipeline system. Currently, the project is facing delays related to COVID-19’s widespread presence in India.
Oilex is up 20 per cent, trading at 0.6 cents per share at 3:03 pm AEST.
