Nido Petroleum Ltd is pleased to announce the completion of a share placement to sophisticated investors raising gross funds of $41.25 million. The share placement was jointly arranged by CLSA Asia-Pacific Markets and Merrill Lynch.
Service Contract 54 Drilling Program
On April 29, 2008, Nido announced plans to expand its drilling program in Service Contract 54 (SC54) from one well to three wells. Nido and its Joint Venture partner Kairiki Energy Limited budgeted to drill at least two shallow water wells with a jack-up rig at the end of 2008, followed by drilling of the Gindara prospect in 2009. The purpose of the fundraising is primarily to initiate this accelerated three-well drilling program that will form the beginning of a larger scale program to be conducted over the next five years. Current record oil prices of over A$130/bbl provide an ideal environment for evaluation of this area with the aim of rapidly extracting maximum value from Nido's Palawan Basin acreage. The funds raised will ensure that Nido is well positioned to secure drilling rigs and additional long lead time items for the increased drilling program in the current tight market conditions.
In addition to meeting SC54 drilling commitments, the funds raised from the share placement will be used to meet Nido's working capital requirements pending the receipt of Galoc revenues, which have been delayed by approximately 60 days resulting in increased capital costs from initial budgetary amounts. Nido is confident that, with hook-up and commissioning of the FPSO underway, further delays to the Galoc project are unlikely to arise, with first oil expected in June.
The share placement has enabled Nido to strengthen and diversify its institutional shareholder base, including through the introduction of new funds from London, Singapore and Australia.
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