The placement – equivalent to 15% of Sydney Gas shares currently on issue – was the first step in AJ Lucas’ plan to take up to a $47.2 million equity in the under-performing coal seam methane producer.
Further tranches of options exercisable in two years time, and three years time, will raise another $27.2 million if exercised, giving AJ Lucas about 25% in Sydney Gas.
Sydney Gas said yesterday that the new capital would accelerate its exploration programs and develop its CSM assets.
“The Hunter Gas exploration is the current focus of activity and will be progressed, taking fully into account technical, environmental and social benefit cost considerations,” the company said.
AJ Lucas is recognised as a leader in CSM drilling technology. It already has a partnership with junior explorer and producer Molopo Australia in developing prospects in the Gloucester Basin near Newcastle, NSW.
In addition to the appointment of Andy Lukas as Sydney Gas' chief executive, the CSM producer will make AJ Lucas executive chairman Allan Campbell non-executive director.
