Carnarvon successful in capital raise

CARNARVON Petroleum has successfully raised A$79 million from institutional investors for its future development plans of the massive Dorado oil discovery.
Carnarvon successful in capital raise Carnarvon successful in capital raise Carnarvon successful in capital raise Carnarvon successful in capital raise Carnarvon successful in capital raise

 

Carnarvon will issue 202.6 million new shares at the offer price of 39 cents per share. The issue price represents an 8.2% discount to the last closing price of 42.5cps and a 9.2% discount to the five day volume weighted average price of 42.9c.

The shares will be issued and settled next Monday and allotment will be on Tuesday July 30.

"Carnarvon is delighted with the successful outcome of the institutional placement and the support received from new and existing shareholders," managing director Adrian Cook said.

"The proceeds provide Carnarvon the opportunity to progress the Dorado project through to the development phase and will also support the company's other key strategic initiatives."

Carnarvon holds a 20% stake in the massive Dorado oil discovery alongside operator Santos (80%) and intends to use the cash to fund ongoing appraisal of the field including 3D seismic and well costs.

Yesterday afternoon RBC Capital Markets said it was not surprised by the placement, but that it had anticipated Carnarvon would wait until the results of its current drilling campaign.

Carnarvon saw its share price fall following the results of its last exploration well Roc South-1 which came up a duster earlier this month.

The Carnarvon-Santos joint venture is currently drilling the Dorado-3 appraisal well in WA-437-P.

 RBC retains its outperform recommendation. It initiated coverage in November.

Carnarvon will also launch a share purchase plan for existing retail shareholders in Australia and New Zealand to raise a further $5 million.

The SPP will open on Thursday August 1 and close on Friday August 15.

Carnarvon was down 4% this morning at 40.7 cents per share. It has market cap of $574 million.