Petsec Energy Raises Funds to Expand 2006 GoM Program

Vermilion 258 Platform
(Click to Enlarge)
Funds from a successful $30 million share placement will be used to accelerate Petsec Energy's exploration and development of its expanding Gulf of Mexico operations.

The issue - underwritten by Ord Minnett and substantially oversubscribed involved the placement of 15 million shares at $2.00 per share to Australian and International investors. It comprises less than 15% of Petsec's issued capital.

Petsec's Executive Chairman, Mr. Terry Fern, said "the funds raised would be used to bring forward development of the Company's new Gulf of Mexico gas fields and for ongoing exploration."

"The funds will be applied primarily toward the drilling and development of Petsec's Vermilion 257 lease, where 3-D mapped targets of 40 Bcfe of gas have been identified," Mr. Fern said.

"It is intended that gas discoveries from this drilling would be produced from our existing Vermilion 258 production platform, which has considerable spare production capacity."

Mr. Fern said "the interruption by hurricanes to Petsec's production over a four-month period last year had diminished the expected working capital for the Company's 2006 program."

"This would otherwise have caused some delay in our 2006 exploration and development program which will expose the Company to greater than 50 Bcfe of gas," he said.

"While Petsec will continue to fund most of its exploration and development activity from cash flow, this successful share placement will enable us to bring forward to May the drilling of our prospects at Vermilion 257 ahead of the hurricane season."

"The exploration and development program for the rest of the first half of the year now includes the Main Pass 18 G-6 well which is currently drilling ahead and should reach target early next week, one well in China, expected to start in April to test a 20 million barrel of oil prospect, and two to three wells on our Vermilion 257 lease."

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