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  • Texas oil and gas company Winchester Energy (WEL) has called a two-day trading halt as it gets ready to tap investors for some fresh funding
  • The company is yet to reveal the details of the capital raise, including how much it plans to raise and for what it will use the funding
  • At this stage, shares will remain in a trading halt until Wednesday, May 26, unless Winchester announces the details of the raise before then
  • Winchester owns around 17000 acres of land in the Eastern Shelf of Texas’ Permian Basin region
  • According to the company, the acreage offers several “stacked pay” targets with prospective unconventional oil opportunities
  • Winchester had just under US$1.2 million (around A$1.5 million) worth of funds in the bank at the end of March after posting net cash outflows of US$400,000 (around A$517,000) for the March quarter
  • Shares in Winchester Energy last traded for 2 cents each on Friday, May 21

Texas oil and gas company Winchester Energy (WEL) has called a two-day trading halt as it gets ready to tap investors for some fresh funding.

The company announced the capital raise this morning but is yet to reveal any further details. As such, it’s currently unknown how much Winchester plans to raise and for what it will use the cash boost.

At this stage, Winchester’s shares will remain in a trading halt until Wednesday, May 26, unless the company announces the details of the raise before then.

Winchester owns over 17000 acres of land in the Eastern Shelf of Texas’ Permian Basin region. According to the company, the acreage offers several “stacked pay” targets with prospective unconventional oil opportunities.

Winchester took on an independent reserve and resource estimate for its string of oil resources in late 2020. The results highlighted 496,000 barrels of oil equivalent worth of 3P reserves, with a combined 11.1 million barrels of oil equivalent in contingent and prospective resources.

In this context, 3P reserves refer to the combined proven, probable and possible reserves of oil in a project area.

Taking a look at Winchester’s latest quarter financial report, the company made just over US$400,000 (around A$517,000) in customer receipts over the March 2020 quarter but spent roughly US$800,000 (around A$1.03 million) on operating activities — resulting in net cash outflows of US$400,000.

Given the company had just under US$1.2 million (around A$1.5 million) worth of funds in the bank at the end of March, this gave Winchester around three financial quarters’ worth of cash to play with at a consistent level of spending.

Nevertheless, whether the upcoming cap raise is a simple balance sheet booster for Winchester to continue its exploration and development work in Texas or if something bigger is in the works for the company is still unknown.

Shares in Winchester Energy last traded for 2 cents each on Friday, May 21. The company has a $14 million market cap.

WEL by the numbers
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