The company will place 11.7 million shares at 35c each with institutional and direct investors. A broker has also agreed to place $750,000, Golden Gate said.

Last month, the company completed a farm-in agreement for BNP Petroleum to acquire a 10% working interest in the Padre Island Dunn-Peach-6 well, to test the Plum Shallow Prospect.

Meanwhile, the Plum Deep Prospect, to be drilled this year, will target P50 reserves estimated at greater than 290 billion cubic feet.

In September, Golden Gate announced it would sell half of its exploration interests in the Padre Island Project UK-based Lodore Resources for US$420,000 (A$562,000).

To date, five deep gas wells have been drilled on the Padre Island leases, all with gas produced to surface and three wells currently on production.