www.aurelianoil.com
Aurelian Oil & Gas PLC, was founded in December 2002, and is focused on the re-emerging Central and Eastern European oil and gas markets, the oldest producing oil province in the world.
Current projects span the region from Poland to Bulgaria, with production in Romania, a deep appraisal well drilled on a large structure in Poland in March 2007 to be developed with a further horizontal well to be drilled in 2010, together with exciting exploration prospects including projects in four countries, Romania (4 blocks), Slovakia (3 blocks), Bulgaria (2 blocks) and Poland (14 blocks). Aurelian is the operator in all of these except Bulgaria.
Aurelian Oil & Gas placing gets strong investor support
Aurelian Oil & Gas (AIM: AUL) said it has received strong investor support for its proposed placing, and as a result is going to raise an additional €7 million, taking the gross proceeds to approximately €39 million. The placing price will be 32 pence per share and it expects the new shares to be admitted to AIM on or around 4 February 2010.
The proceeds will be used to accelerate the company's exploration and development activities in its core areas which were previously scheduled for 2012 and beyond, Aurelian said. The company’s existing cash resource of €12 million will also be used for the appraisal and exploration activities in the next two years.
Shareholders and directors with significant shareholdings representing approximately 47.28% of the current issued share capital, have submitted non-binding letters of intent in support of the placing. The company is due to hold a shareholder vote on the proposed placing at a general meeting on 3 February 2010.
“We have been given a stamp of approval by some of the most informed investors in the oil and gas industry, endorsing both our strategy and the portfolio of assets that we operate”, Aurelian CEO Rowen Bainbridge commented, “We have an extensive work programme and these funds will provide us with the ability to deliver this, eliminating any previously perceived funding risks surrounding the company."
A number of the company’s directors and major shareholders are among the well-supported placing’s participating investors. With CEO Rowan Bainbridge, chairman David Prior and CFO Mark Reid subscribing for over 200,000 shares each, the company’s president Michael Seymour is subscribing for 125,000 placing shares and non-executive director David Walker will buy 62,500.
Kulczyk Investments, currently the company’s third largest shareholder, will subscribe for 16.3 million shares at the placing price, reflecting an approximate investment of €6 million. Upon closing, with the investment company’s new shares and its current holdings Kulczyk’s stake will represent 10.1% of Aurelian’s enlarged share capital.
The funds from the placing are earmarked for funding the first Siekierki well in Poland and up to seven exploration and appraisal wells in eastern Europe in the next two years, targeting assets with an expected monetary value (EMV) of €1.2 billion. The appraisal well to be drilled in the Siekierki gas field will target a most likely resource of 346 bcf (billion cubic feet) of natural gas with an EMV (expected monetary value) of €478 million. The company’s total EMV currently stands at €1.36 billion and reflects its recent strategic partnership with Polish state oil and gas company Polskie Gornictwo Naftowe i Gazownictwo S.A (PGNiG) to explore the Polish Western Carpathians. Following the partnership agreement, the company’s total resource amounted to 1.2 tcf (trillion cubic feet) and 326 mmbbls (million barrels) of oil.
Other wells set to be drilled in the next two years include an appraisal and development well in Suceava targeting a resource of 1 bcf for an EMV of €1 million, and up to 6 exploration wells targeting Karpaty East with a resource of 295 mmbbls and an EMV of €537 million, Bieszczady with a resource of 59 mmbbls for an EMV of €105 million, Svidnik with an ML resource of 408 bcf for an EMV of €136 million and Golitza with an ML resource of 59 bcf for an EMV of 11 million.
Broker Jefferies International has recently raised its price target on Aurelian Oil & Gas to 58 pence as the Eastern Europe focused junior’s actual market value of 30 pence per share eclipsed the old target of 21 pence after a competent persons report (CPR) revealed greater exploration potential than previously recognized.
The broker’s total NAV estimate for Aurelian consists of a core NAV of 42 pence per share and a risked NAV of 63 pence per share, making for a total of 105 pence per share. The 58 pence target equalled core NAV plus risked values for the 2010 drilling programme. The Siekierki field was the largest component worth 39 pence per share and risked at 67% with further upside possible if the project can be successfully appraised and progressed into full development.
The report also identified four other leads and prospects, which had "company changing potential". These included the Rudawka prospect with a 238 mmbbl gross resource, due to be drilled in Q4 2010.
In 2011 activity will be stepped up with Aurelian likely to drill the Zarszyn prospect, which has a gross resource of 119 mmbbl, Mszana Dolna South with a gross resource of119 mmbbl and Smilno with a gross resource of 810 bcf. Jefferies said that these four wells have the potential to transform Aurelian with an unrisked upside of 470 pence.
