Comet Ridge (ASX: COI) is raising up to A$7.7 million through a non-renounceable entitlement offer to fund its coal seam gas exploration and appraisal in Queensland over the next 12 months.
With the funds, the company plans to drill up to 8 pilot and 4 core wells at its Mahalo project and 1 pre-pilot production well and 2 appraisal wells at the Gunn Project Area in the Galilee Basin.
The Mahalo production pilot is aimed at demonstrating commercial gas flows from the ATP 337P Mahalo Block with the intention of achieving an early initial reserves certification by moving best contingent resources to proved and probable reserves.
Comet Ridge’s share of costs for the Mahalo wells will be carried by Stanwell Corporation.
The company is also planning to use the Gunn wells to appraise the extent and characteristics of the coals in a new extension of the Gunn Project Area.
Equity raising
The funds will be raised through a 1 for 4 accelerated non-renounceable entitlement offer of up to 77.1 million Comet Ridge shares priced at A$0.10 each.
This represents a 23.3% discount to the 5-day volume weighted average price prior to 7 August.
The company’s directors intend to subscribe for all or part of their entitlements to show their support for the equity raising.
Under the institutional component of the offer, which will raise up to A$4.2 million, entitlements not taken up by existing institutional shareholders will be offered to other eligible institutional investors by way of an institutional bookbuild.
Retail shareholders, which make up the remaining A$3.5 million, may also apply for additional new shares from a pool of entitlement shares not taken up by other eligible retail shareholders.
Wilson HTM Corporate Finance Limited is the lead manager of the equity raising.
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