The CSM operator plans to have completed the raising, involving the placement of nearly 61 million fully-paid ordinary shares at 42.5c each to clients of Patersons Securities, by this Friday.
Eastern Star said some funds would be used to develop its Bohena project area by establishing two five-well production pilots, drilling up to 15 coreholes and a lateral well program to prove up to 600 petajoules of initial proven and probable (2P) gas reserves.
In addition, the proceeds would pay for local gas pipeline and associated infrastructure and general working capital.
The company said the funds would not pay for the Wilga Park Power Station planned for 2008. Rather, it intends to seek debt funding for that capital expenditure.