Oilex Ltd has reached in-principle agreement with Hartleys Limited to raise up to $10.1 million through the issue of up to 43.8 million ordinary shares at an issue price of $0.23 per share. The shares will be issued predominantly to international and domestic institutional investors and sophisticated investor clients of Hartleys.
The funds raised pursuant to the Issue will be utilised in progressing the Company's oil and gas activities and ongoing working capital requirements, with priority on production from:
The primary objective of the Company is to become cash flow positive in 2009. The main focus of the work program for 2009 will be developing and producing oil from projects in the Cambay Field complex. The Cambay MBS oil project is the first into production and the focus will be to expand this project in 2009. The Cambay complex of projects is onshore with low estimated operating and capital costs and excellent commercial terms and it is expected that projects will be robust even in a low oil price environment. In addition to funding Cambay, funds will be used for the Pendalian Field development in Indonesia to generate early production.
The Directors are mindful of the difficult global financial and economic environment and the Company is undertaking a process of adjusting its portfolio interests and commitments and intends to reduce its overheads significantly in first quarter of 2009. These measures are designed to maximise short term returns and place Oilex in a strong position during the global downturn. The focus for 2009 is to increase production and to generate positive operating cash flows.
The placement shares will be issued in two tranches. The first tranche of shares comprising 19.8 million shares will be issued under our 15% placing limit. The second tranche of shares comprising 24 million shares will be subject to shareholder approval to be obtained at a general meeting of shareholders on or around 27 January 2009.
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