Caspian told the ASX today it had reached agreement with Cartesian Capital Pty and Patersons Securities (joint lead managers) for the placement of 58 million shares at an issue price of 5 cents per share.

The managers had completed their book-build exercise, after which the 58 million shares would be allotted to their clients, who included a number of institutional investors. The allotment and receipt of the A$2.9 million worth of shares was expected to be completed on or around August 29.

Funds raised would be used to settle the company’s liability to the vendor of the Kyrgyz oil properties, feasibility studies for shallow oil production, for general working capital and to assist with the identification and assessment of complementary new opportunities in the energy sector.

Earlier this month EnergyReview.net reported that Caspian had managed to lure Santos, Australia's third largest energy company, into a joint venture in Kyrgyzstan.

Under terms of the farm-in deal – which will be Santos' first foray into Central Asia - Santos will earn an 80% operated working interest in 10 exploration licences, covering 16,500 square kilometres, currently owned by Caspian.

All all but one of the leases are in the Fergana Basin, an established petroleum province with total discovered reserves from 58 fields estimated to exceed 1.2 billion barrels of oil and 5.5 tcf of gas.

Santos managing director John Ellice-Flint said Santos would fund and operate a phased work program up to the value of US$28 million over all of the licences for four years.

Subject to Caspian shareholder approval, Santos would take a 15% direct equity placement in Caspian, at an issue price of A3c per share, and would also be granted an option to acquire a further 40 million shares representing about 4.9% of Caspian's issued share capital.