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UIL Energy completes capital raising to fund 2017 drilling campaign
2 minute read
Australian oil and gas exploration group, UIL Energy (ASX: UIL) announced on Friday morning that it had received strong support from shareholders for its Share Purchase Plan (SPP) announced on September 29, 2016.
Applications were received for $642,500, including $195,000 from shareholders seeking to apply for shortfall from the SPP.
These funds combined with a placement of $750,000 announced on September 29 will assist UIL in accelerating its activities in the Perth Basin where it is focused on two highly prospective locations.
The company expects to commence drilling in 2017 and it has already initiated planning efforts on the Ocean Hill prospect that includes approvals for drilling of Ocean Hill #2, as well as the acquisition of a 3-D seismic survey covering up to 250 square kilometres over the Ocean Hill permit.
Managing Director, John De Stefani highlighted the fact that the Ocean Hill prospect combined with the group’s current Perth Basin portfolio provided one of the most highly prospective acreage position is in that region.
The earlier Ocean Hill #1 discovery well, initially identified a gas resource with the potential to become significantly larger following further drilling.
In describing the geological features, De Stefani said, “The Ocean Hill prospect demonstrates some geological attributes similar to those seen in the Gingin gas field and Red Gully gas projects where Empire Oil and Gas commenced production in late 2013”.
This type of asset fits with the group’s strategy of targeting areas that have known petroleum basins with a history of gas production that have pipeline or transport infrastructure in place or in reasonable proximity.
UIL’s permits in Western Australia provide it with access to the largest domestic gas sector in Australia, a market which is supply constrained with estimated gas prices expected to rise above $10 per gigajoule in real terms over the next 16 years.
However, projections regarding commodity prices may or may not be met and investors considering this early stage exploration stock should seek independent financial advice.