Rift Oil plc has finalized a placing of new shares for cash to raise GBP 5,165,650 through a placing of 98,393,348 ordinary shares at a placing price of 5.25p per share. These shares were placed by the Company's broker, RBC Capital Markets, with institutional clients and high net worth individuals.
Together with the Company's existing cash balances of $11 million, the net proceeds of the Placing will be used to fund the consideration for the acquisition of Austral's 35% interest in PPL 235, 50% interest in PPL 261 and 35% interest in the Coral Sea Rig, to finance 100% of the expenditure of the Company's current work program of drilling and testing the Puk Puk well, spudded in May, testing Douglas 1 and funding the acquisition of 70km of seismic on some of the Company's unexplored acreage.
Each of Thornaby Limited and Ocarina Investments Limited are also participating in the Placing. They are each subscribing for 2,857,144 shares at the Placing Price.
The Company has, under the terms of the placing agreement governing the Placing, granted to RBC, subject to completion of the Placing, warrants to subscribe for 4,348,239 new ordinary shares in the share capital of the Company, such Warrants being exercisable at the Placing Price at any time from the first anniversary of admission of the Placing Shares until the second anniversary of admission of the Placing Shares.
Application has been made for the Placing Shares to be admitted to trading on AIM and dealings are expected to commence on June 10, 2008. Following the Placing there will be 795,838,680 shares in issue.
The drilling program at the Puk Puk site on PPL 235 has reached 900 meters on its way to the 2,000 meters target and is currently proceeding satisfactorily.
The Company has been in discussions recently with a company regarding an LNG off-take agreement for the delivery of gas. These discussions are ongoing.
"We are delighted that we can now pursue and expand exploration of our Papua New Guinean gas assets," said Chairman, Ian Gowrie-Smith. "In particular, the funds raised will allow the Company to complete the acquisition of the interests previously held by Austral Pacific and allow the Company to embark on an expanded seismic program. The rise in oil and gas prices over the last year has changed the commercial opportunities to exploit our 7,000 sq km petroleum licenses in PNG's foreland region. Rift's first priority is to continue with its current program aiming at supplying Alcan, pursuant to the MOU, over the next 20 years. Furthermore, Rift is actively examining other opportunities including the conversion of gas to LNG by vessels possibly in association with regional gas gathering."
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