AusTex Oil Limited (ASX:AOK) Announce Placement to Sophisticated Investment Group To Fund Development in USA
Sydney, Mar 2, 2011 AEST (ABN Newswire) - AusTex Oil Limited (
ASX:AOK) is pleased to announce that it has entered into an agreement with a Singapore based investment group to provide funding for the ongoing development of oil and gas leases in the USA.
Placement and Development Funding
AOK has agreed to issue 22 million shares at 8 cents per share under Listing Rule 7.1 for a consideration of A$1.76 million to a single investment group with a long term view on the mid-continent oil industry.
This group has been granted the first-right of refusal to provide a further A$10 million by way of convertible note or other instrument. Terms and conditions of the second stage of funding will be announced when finalised.
Purpose of Funding
The purpose of the funding is to expedite the development of the Company's producing oil leases in Oklahoma and Kansas and acquire additional acreage in the Northern Oklahoma Mississippian Oil Play.
Northern Oklahoma Oil Play - increases to ~5,000 acres
Kay and Noble Counties, Oklahoma
AOK 100% Working Interest - ~80% Net Revenue Interest
AOK through its wholly owned subsidiary, International Energy Corporation (Northern Oklahoma), has now increased its oil and gas leases to more than 5,000 acres and is continuing leasing.
The 907 acre East Tonkawa Unit is held by production. Current field operations are underway increasing oil production from existing wells. A program of vertical and horizontal drilling will commence later in the year.
Background to Northern Oklahoma Oil Play
Since early 2010, a number of NYSE listed exploration and production companies began refocusing their North American operations on liquids rich projects. One of the fastest moving regional development plays is located in Northern Oklahoma.
End of year reports and company presentations released by competitors in January 2011, show demonstrated success in drilling and completing horizontal wells in the Mississippi Lime with initial production rates of between 300 and 1,300 barrels of oil equivalent per day (BOE/PD) per well. Estimated Ultimate Recovery (EUR) is reported at 300,000 BOE per well. Completion costs per well including allocation for water disposal are reported at A$2.1 million per well with an Internal Rate of Return of 80%.
Whilst the focus has been on horizontal completions in the Mississippi Lime formation with a total vertical depth of 6,000 feet, recent drilling activity has also included vertical and horizontal wells in the shallower Pennsylvanian Formations. Target zones include the Layton, Tonkawa and Cleveland formations at less than 3,500 feet total vertical depth. EUR on a vertical well is between 30,000 to 40,000 barrels of oil from each formation at a cost of A$450,000 with a 10 acre spacing per well. All of these targets are present in the AOK acreage.
Updated on Timetable for proposed Toronto Stock Exchange Listing
The proposed timetable for the TSX application is as follows:-
-------------------------------------------Event Expected Date of Completion-------------------------------------------AOK end of fiscal year 31 March 2011-------------------------------------------Audit Report May 2011-------------------------------------------Independent Reserve Report May 2011-------------------------------------------TSX Application Lodged June 2011-------------------------------------------
In November 2010, AOK announced the appointment of Toronto based Kingsdale Capital Markets Inc., to act as sponsoring broker for the planned application to dual list on the Toronto Stock Exchange. AOK has now appointed New York based, Arrowhead BID Inc., to facilitate a North American investor relations program. As an initial step this program includes a series of presentations during March 2011 in the USA and Canada.
About AusTex Oil Limited
AusTex Oil Limited (ASX:AOK) (OTCQX:ATXDY) is a Public Company listed on the Australian Securities Exchange (ASX) and the OTCQX.
AusTex is focused on exploration and development of oil and gas leases in the USA. The company produces oil and gas in Oklahoma and Kansas and is currently developing producing leases in both states with interests in 11,600 net acres of oil and gas leases in the Mississippi Lime Play. The Company has net production of circa 800 boe/day with Independent 1P reserves certified at 3.505 Million BOE with NPV10 of US34.8 million as at 31 December 2015.
US operations are based in Tulsa, Oklahoma, with an office at 1801 East 71st Street. International Energy Corporation (Oklahoma) is a wholly owned subsidiary and a licensed oil and gas operator in Oklahoma and Kansas.
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