Calima Energy (ASX: CE1) has raised $25 million in an oversubscribed placement and is now fully funded to progress an upcoming drilling program in Canada’s hottest energy province later this year.
The placement – which took place at 5.4c per share, an 11% discount to the 5-day VWAP – was heavily oversubscribed with support received from sophisticated and professional investors reflecting the strong interest in Calima and its high-class Montney oil and gas property in Canada.
The market interest in this placement was significant and we would like to thank all participants for their support and confidence in our story,” Calima’s Managing Director Alan Stein said.
“The next 6 months are going to be very exciting and we look forward to delivering positive news flow on our drilling campaign scheduled to commence later this year.”
The company – which wholly-owns drilling rights to 72,000 acres in British Columbia, Canada – will use the funds to drill and test three wells on Calima Lands in the Montney region commencing in December 2018.
Calima will be drilling one vertical well and two horizontal wells. The vertical well will provide stratigraphic calibration and will be cored to recover samples of rock for measurement and analysis.
The horizontal wells will be stimulated with hydraulic fractures and put on an extended production test over a period of 4-6 weeks.
Proceeds will also be used for the Company’s working capital requirements, and to maintain the company’s other portfolio assets and assess new ventures.
Tribeca Investment Partners cornerstoned the Placement and have also agreed to arrange project development finance facilities of up to $40 million.
Tribeca’s appointment, and any subsequent financing, is subject to the usual due diligence reviews with terms to be negotiated and agreed between the parties.
Shares in Calima closed Friday at 5.8c.
