Australia’s Red Emperor Resources has raised the equivalent of P199 million to fund the drilling activities for oil and gas in Service Contract 55 in offshore Southwest Palawan.
The placement of 72 million new ordinary shares at A$0.08 apiece, through brokers Brandon Hill Capital of London and 708 Capital of Australia, was oversubscribed.
Red Emperor managing director Greg Bandy said the proceeds from the share sale and existing cash resources will fund the drilling activities for SC55, where the company has a 15 percent interest.
“This financing will further complement Red Emperor’s existing cash resources of circa £6 million and enable the company to move forward quickly should a suitable opportunity arise,” said Bandy.
SC55 is a deep-water block in the middle of a proven regional oil and gas fairway that extends from the productive offshore Borneo region in the southwest to the offshore Philippine production assets of Northwest Palawan.
The first prospect Hawkeye-1 was identified by way of a 2D seismic survey in 2007 and further defined with a 600 km 3D seismic survey acquired by SC55 operator Otto Energy Investment Ltd. in late 2009.
Hawkeye-1 has been assessed by Otto as containing a best estimate STOIIP of 480 million barrels (MMbbls) of oil and a gross prospective resource of 112 MMbbls.
According to the Schlumberger Oilfield Glossary, STOIIP is stock-tank oil initially in place or the volume of oil in a reservoir prior to production,.
Otto has secured the Maersk Venturer drillship to drill the Hawkeye-1 prospect, with a spud date set towards the end of July 2015.
“The well is expected to take less than a month to drill,” said Bandy.
Red Emperor has applied to be admitted by the London Stock Exchange on the AIM or Alternative Investment Market, where shares of smaller companies are traded.
The company expects it shares to be traded on the AIM some time next week.