IPB the place to be: raised funds will further Gwydion oil potential

By Trevor Hoey. Published at Apr 18, 2019, in Energy

IPB Petroleum Ltd (ASX:IPB) has received firm subscriptions for a placement of approximately 23.75 million new shares to be issued at 4.0 cents per share to institutional, professional and sophisticated investors both domestically and internationally.

Completion of the placement should increase the company’s funds from $380,000 at the end of March to approximately $1.3 million, providing important capital to progress its activities in the Browse Basin.

Proceeds of the placement will be used to progress drilling, planning and testing works for WA-424-P prior to a final investment decision being made, as well as requisite regulatory approval applications, environmental planning, engineering studies and commercial negotiations and proposed debt funding activities.

The proposed Idris well is aimed at testing a potentially large up-dip stratigraphic extension of the existing Gwydion oil discovery within IPB’s 100% owned WA-424-P permit P50 Prospective Resource 70MMBBLS recoverable.

The injection of funds will also assist in financing ongoing permit study work, seismic processing and farmout related activities at the prospect which is located in the Browse Basin in relatively close proximity to other major projects.

DLT activity examines Gwydion discovery

IPB has completed initial concept and feasibility studies.

The WA-424-P Project is currently at pre-FID stage awaiting regulatory approvals and will be subject to a successful debt financing which is estimated to take around 4 months.

IPB is currently arranging debt finance up to US$80 million to fund its Drilling, Logging and Testing (DLT) program.

This project has the objective of delineating the upside resources available, or identified with the original Gwydion oil discovery.

The company has gone out to tender for drill rig, well testing and well services and other suppliers, and anticipates having agreements in-place subject to financing by mid-year with major supplies.

IPB has also appointed Atoll Financial to arrange international debt finance for the project.

The map below illustrates IPB’s permits in the Browse Basin, including the Idris Prospect and its close proximity to Icthys and Burnside.

Icthys, in particular, points to significant upside for IPB.

If IPB is not successful in progressing the DLT Project, it still has the option to continue to pursue farm-out of an interest to carry on its exploration/appraisal well Idris to test the up-dip extension of the existing Gwydion oil discovery.

Having renewed its WA-424-P permit containing the Gwydion oil discovery last June, IPB has until mid-2021 to commence drilling the subject well under title conditions.

Management has previously reported strong interest in its ongoing farmout project over the past 12 months, with several companies providing positive feedback and technical validation in relation to the Idris Prospect.

For a number of strategic or commercial reasons some parties elected not to continue with the process at this point in time.

The improving macro-economic outlook for oil prices largely due to under investment in exploration and appraisal activities in recent years should provide an opportunity for interested parties to once again pursue commercial opportunities such as a farm-in to IPB’s WA-424-P Permit.

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

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S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

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