Buru Energy Ltd (ASX:BRU) has today opened its 1:5 non-renounceable entitlement offer to raise up to $10.2 million before costs.
The issue is priced at $0.15, with Buru last trading at $0.17.
Funds are to be used to accelerate the development of Buru’s 100% owned Ungani Oilfield including the drilling of two oil wells in 2017, with the aim of increasing production capacity and recoverable oil resources.
Two of Buru’s largest shareholders have each confirmed their support for this capital raising and have confirmed to the company that they intend to take up their full entitlements.
This intended support would account for a total subscription of circa $1.7 million.
Ungani is a multiphase development
Funds raised by the rights issue are proposed to be used as part of the funding for the multi-phase development program being undertaken at the company’s 100% owned Ungani Oilfield.
This program is aimed at increasing the field’s production capacity and recoverable oil resources, and has already started with the recent recommencement of oil production from Ungani, with production from the existing two wells being progressively increased towards the initial target of 1,250 barrels of oil per day.