Sacgasco Ltd (ASX:SGC) has raised circa $2.44 million via the placement of shares to sophisticated and institutional investors at $0.085 each, to advance its Sacramento Basin natural gas drilling.
Importantly, the placement was strongly supported by existing and new shareholders in London and Australia.
The additional funds will be used to complete the drilling, completion of testing and production hook-up at the Dempsey well, part of Sacgasco’s Sacramento Basin assets onshore California.
The company will also use the funds for hooking up existing wells for more production, permitting the Alvares Prospect well re-entry, and ongoing/new oil and gas lease rentals.
Dempsey is one of the largest undrilled mapped structural closures in the northeastern part of the prolific Sacramento Gas Basin and is interpreted to be optimally located.
As at June, Sacgasco’s 27-well portfolio with 10 currently in production provided multiple opportunities to bring additional wells back into production.
It is worth noting that the Californian natural gas market consumption is equivalent to circa 2.25 times the entire output of Australia’s North West Shelf LNG plants.
However, California produces less than 10% of its gas requirement.
The access to extensive gas pipelines and production equipment enhances the commercial potential of Sacgasco’s Sacramento Basin natural gas assets.