Conditional Funding to Accelerate 2012 Drill Program
Perth, Mar 19, 2012 AEST (ABN Newswire) - AusTex Oil Limited (
ASX:AOK) (OTCQX:ATXDY) is pleased to announce that following on from the recently announced completion of Stage 1 of the $AU4.1m placement, the Company has entered into a conditional agreement for the proposed additional funding of up to US$10m to continue exploration and development of the Company's oil and gas leases in Oklahoma and Kansas.
The funds will be made available to the Company pursuant to convertible notes funded by North American-based Institutions, including New York based Iroquois Capital Opportunity Fund, LP (ICO Fund), following regulatory and shareholder approval. Under the agreement, up to US$10m of convertible notes will be issued to those investors with a conversion price of $AU0.15 cents for each fully-paid ordinary share. In addition, AOK would issue one free option for each 2 convertible notes with an exercise price of $AU0.20 within 3 years of the date of shareholder approval. Full particulars of the convertible notes and the previously announced proposed placement to a Director will be detailed in a Notice of EGM to be sent to shareholders in coming weeks.
ICO Fund currently holds 8 % of the fully paid ordinary shares on issue and is a related party as defined under the Corporations Act.
This important funding package will allow the company to continue to aggressively drill its Northern Oklahoma Snake River Project in the Mississippi Lime Play and test drill a new prospect. Following on from the recent production success of the first two vertical wells, development drilling continues with participation underway in the first horizontal well. Additional vertical wells are scheduled to be drilled over the coming weeks.
This funding package will also assist AOK to finalise a listing on the TSX within this calendar year. The Directors of AOK see this strategic move as critical for the company to gain access to a market that better understands the opportunities the board is unlocking in North America, and in turn provide a share price that more closely reflects the assets held within our company, driving value to all shareholders.
Use of Funds:
The funds will be used primarily for the continuation of the Company's exploration and development program on its oil and gas leases in Oklahoma and Kansas and also for general working capital purposes.
Draft Indicative Timetable (subject to change):
- Notice of EGM (Director Placement and Convertible Note) - 2 April, 2012
- Approximate date of EGM: - 3 May, 2012
- Settlement of Funding: - 4 May, 2012
Commenting on the new funding arrangements, Mr Daniel Lanskey, AusTex's Managing Director, said:
"Following our recent successes with wells in the Mississippi Lime in Northern Oklahoma, this funding will enable us to continue the development of our oil and gas leases, accelerate drilling and continue to grow our oil production. We are excited about the support we are receiving from North American investors in the leadup to our proposed TSX listing".
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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