CSM player debuts on ASX

COAL seam methane explorer Pure Energy Resources listed on the Australian Stock Exchange yesterday. It opened at 21.5c, a 7.5% premium to its initial public offer price of 20c, but closed slightly underwater at 19c.
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The Brisbane-based company, in which Australia’s largest specialist CSM company Arrow Energy is a major stakeholder, raised $5 million via the IPO, which closed oversubscribed.

Managing director Steve Beardsall said retail and institutional investors had given Pure strong backing.

“Because of its potential to meet a significant proportion of eastern Australia’s energy requirements, coal seam gas is increasingly being embraced as a competitive alternative energy source, particularly against the backdrop of high oil prices and rising energy costs,” he said.

Pure’s project portfolio includes five CSM permits in Queensland’s Bowen Basin and a single permit in eastern Tasmania.

“The funds raised through our IPO will enable us to pursue focused and intensive programs of reserve certification on these properties with a view to bringing them into production as rapidly as possible,” Beardsall said.

Pure was formed by a consortium of experienced oil and gas executives to target Australia’s emerging CSM market.

The company has five CSM permits in Queensland’s Bowen Basin: two granted permits covering 13,000 square kilometres and three permit applications covering 4900sq.km, and a single permit in eastern Tasmania, covering 12,000sq.km.

Arrow Energy, which took up a cornerstone $1 million seed capital investment in Pure, has also reached an agreement to farm-in to two of its Queensland projects.

Arrow holds a 14% interest in Pure, which via options could increase to approximately 25% on a fully diluted basis.

Both the Queensland and Tasmanian project areas are near existing infrastructure and growing energy markets.

The permits are adjacent to established commercial CSM projects including Arrow’s Moranbah Project, Santos’ Fairview Project, Origin Energy’s Spring Gully Project and Anglo Coal’s Moura Project, and close to the existing Moranbah and Gladstone Pipelines.

Arrow closed down 1.5c at 60c.

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