Aurelian to raise €95 mln to take advantage of opportunities in Eastern Europe

Aurelian Oil & Gas (LON:AUL) plans to expand its upcoming exploration programme, after it agreed a €95 million funding.

The company intends to issue over 146 million shares at 57.5 pence each, in a placing arranged by Macquarie Capital and Oriel Securities.

Aurelian is focused on two core areas - the Southern Permian Basin in Poland and the Carpathian Thrust Fold belt which spans Southern Poland, Slovakia and Western Romania. The Siekierki tight gas project in the Permian Basin is its most advanced asset. 

At Siekierki Aurelian is currently drilling Trzek-2 - the first multi fracced horizontal well in Poland. 

The company now has an enviable funding position compared to many of its peers in the junior market. Even before this major €95 million capitalisation it already had around €30 million in cash and it recently secured a €75 million credit facility.

Now 2011’s already busy schedule has been taken to a new level entirely.

The new capital will allow Aurelian to expand its exploration work massively, adding 12 new wells to the original 5 well programme.

Chief executive Rowen Bainbridge emphasised that Aurelian can now capitalise on it first mover advantage. 

“Aurelian now has a strong platform to take advantage of a number of exciting opportunities in a stable and energy hungry part of the world,” Bainbridge said.

“The proceeds from this capital raise will ensure that our 17 well exploration and appraisal programme is fully funded thus enabling us to realise the maximum potential of our asset base.” 

Bainbridge concluded: “We are now funded to achieve first production from our Siekierki Tight Gas project in Q1 2012 and to create a business of real substance for our shareholders." 

Aurelian has now put together a 17-well programme, as a result of its significant progress in 2010.

The expanded programme will test prospects that hold a risked expected monetary value (Risked EMV) of €1.7 billion. 

A five well programme was already planned at Siekierki and the Carpathian Thrust Fold belt, which overall will cost around €22 million.

Two wells will look for further potential in the surrounding area, with one exploration well in both the Siekierki South West and the Siekierki North West areas.

Aurelian plans to drill three wells on the Carpathian Thrust Fold belt – with two in Poland and one in Romania.

Crucially the expanded programme will now include another Trzek well, which be drilled back-to-back with Trzek-2.

Subsequently, the pair of wells will be used to bring the Siekierki Tight Gas Project into early production in Q1 2012.

This part of the programme is expected to cost €16.7 million.

Aurelian is planning is also planning a substantial investment to develop new strategic alliances in its ‘Tight Gas’ and Carpathian Thrust Fold Belt core areas. A €26.7 million investment will help it prepare for future initiatives, funding two exploration wells, as well as seismic and technical studies. 

A further €20 million will be used for additional seismic and drilling core areas up until the end of 2012.  

This will include the extension of seismic coverage over the entire acreage in these areas, as well as providing the flexibility to take advantage of new opportunities to increase acreage position and/or carry out further exploration.

Separately €3.6 million will fund a work-over and an exploration well in a newly established Carpathian Conventional Gas business, in the 60 percent owned Karpaty West licence.

Also, two exploration wells will be drilled as part of a newly established ‘Reef Oil business’, on the 35 percent owned Cybinka and Torzym licences in the Permian basin. This has been allocated €6 million.