FAR Ltd has completed a placement to institutional and sophisticated investors to raise $46.7 million before expenses by issuing 424,961,685 shares.
The capital raising follows the significant oil discovery in FAN-1, offshore Senegal with its partners Cairn Energy plc, ConocoPhillips and Petrosen.
The semi-submersible drilling unit “Cajun Express” used to drill the FAN-1 well has now mobilised to complete the second exploration well in the Senegalese drilling program, SNE-1.
Cath Norman FAR managing director said, “We won very strong support for this capital raising. Given the state of the market we are very pleased to have been oversubscribed with particularly strong support from Australian institutions and our existing shareholders.”
“The discovery of oil in FAN-1 and an extended period of unscheduled maintenance have resulted in an increase to the forecast cost of the Senegal drilling program that exceeds our funding cap for both wells. The additional funds raised will now allow us to complete this very exciting drilling program.”
“The discovery of oil in FAN-1 has gone some way to increasing the chance of success in the SNE-1 well so we eagerly await the results from this next well and hope to repeat the success of FAN-1. FAR also looks forward to advancing our other exploration ventures in Kenya, Guinea Bissau and Australia and embarking on new ventures.”
This capital raising leaves FAR with approximately A$85 million of cash and in a very strong position from which to complete our near term corporate objectives.”
The placement was arranged by Bell Potter Securities Limited as Sole Lead Manager.
The price per new share of 11 cents under the placement represents an 18.5% discount to the company’s latest market price on the ASX and a 10.3% discount to the 10 day volume weighted average price on the ASX.
Upon completion of the placement, the placement shares will represent approximately 13.6% of the enlarged share capital of the company, which will have 3,126,808,427 ordinary shares on issue.