Kinetiko Energy Ltd (ASX:KKO) has secured a $1.7 million investment from shareholders in its latest entitlement offer.
The Australian gas explorer, which is pursuing shallow conventional gas and coal bed methane opportunities in South Africa, opened its one-for-15 offer to raise up to $3.1 million in early May.
Major shareholders and directors got behind the offer, designed to support an aggressive onshore exploration campaign and advance the energy stock towards its gas reserve certification.
Kinetiko’s entitlement offer was announced in tandem with a strategic investment from South African energy powerhouse Pfefo Power in late April.
It comes after KKO struck a deal with the Industrial Development Corporation of South Africa (IDC) to co-develop a gas production field consisting of up to 20 wells.
“Advancing short term gas production ambitions”
Commenting on the raise today, Kinetiko executive chair Adam Sierakowski thanked shareholders for their “comprehensive support”.
“We are encouraged by the interest received from local South African investors in participating in the ongoing shortfall offer and we will update all shareholders as we progress,” he stated.
“Funds raised will be used to aggressively advance the company’s onshore gas exploration activities, including drilling further wells to complement the three wells recently completed at the Korhaan project.
“In addition, the funding will advance the short term gas production ambitions and certifying maiden gas reserves.”
The fine print
Kinetiko set out to raise at least $1.5 million last month, offering investors one new share for every 15 held at 7.5 cents each.
All directors subscribed for a majority of their entitlement in the offer, which raised $1.7 million, and KKO will issue around 22.66 million new shares early next week.
Kinetiko’s CEO and directors made a series of presentations in South Africa last week, netting expressions of interest from local investors and funds that could pick up some of the shortfall shares.
The company expects to place the shares with all interested parties — both domestically and overseas — before June 30.