Melbourne, Aug 13, 2008 AEST (ABN Newswire) - Marion Energy Limited (ASX:MAE) is pleased to announce that it has raised A$15 million in a placement via the issue of 17.442 million shares at A$0.86 per share. Patersons Securities Limited is the Lead Manager to the placement.
The shares have been placed with a limited number of Australian institutions. The amount and timing of the placement were determined by the Company's capital requirements to adequately fund its strategically driven operational program over the coming months.
The placement proceeds will be applied to a near term well drilling program at the Company's Clear Creek and Helper projects at Utah, USA. Management believes that successful completion of the well drilling program will result in significant additions to the Company's total reserves and equally importantly, will result in the total reserves having a significantly higher % of 1P reserves.
This objective is also in line with the strategic review currently being undertaken by the Company and its strategic advisers.
The Company's total 2P reserves from its Clear Creek, Helper and Oklahoma projects will currently stand at 319 Bcf of gas post the completion of the acquisition of the Odyssey Energy Limited interests at Helper and Oklahoma (MAE shareholder meeting to approve this transaction will be held on 1 September, 2008).
The well program will be directed specifically at the following:
- Clear Creek (working interest 100%): the program will likely involve up to three wells (depending upon results) to be drilled on an infill basis aimed at gaining increased total reserves and increased proven reserve certification. Reserves currently certified at Clear Creek stand at 236 Bcf of 2P gas.
- Helper (working interest 70% pre completion of acquisition of Odyssey interest after which it will increase to 100%), Utah: the program will likely involve up to three wells (depending on results) to be drilled. These wells will specifically be targeted to define the reserves associated with the recently announced successful discovery in the Morrison horizon of the Kenilworth Railroad 1-A well and to also target a Mancos shale play. 2P reserves currently certified at Helper stand at 27 Bcf of gas.
In undertaking the capital raising the Board were mindful of:
- The critical need to undertake the drilling of wells to facilitate further the reserve certification process currently in progress and the need to also complete these operations before the forthcoming winter period
- The previously announced delays to bringing production on stream to the level expected (approximately six months behind schedule) and its impact on the timing of associated cash flow generation. These operations are currently ramping up and this process will continue simultaneously with the drilling program
- The previously announced intention to sell the Oklahoma interests is ongoing, but due to difficult capital markets in the USA has not yet been completed, which in turn has delayed anticipated cash generation from this process
The funds raised from the placement will ensure the Company is able to undertake and complete its currently planned operations.
Contact
North American Contact: Mr Jeff Clarke
Managing Director & CEO
Ph: +0011 214 244 7690
Email: jclarke@marionenergy.com
Australian Contact: Mr Peter Collery
Executive Director and Company Secretary
Ph: 03 8862 6466
Email: peter@marionenergy.com.au
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