Hardy Oil & Gas Places 5,204,660 New Ordinary Shares
Hardy Oil & Gas (AIM: HDY) is raising £14.7m (before expenses) by way of a placing of 5,204,660 ordinary shares of $0.01 each at a price of 283p per share. The Placing proceeds will be used to help fund the working capital requirements of the Company.
Hardy floated on the AIM market of the London Stock Exchange in June 2005, raising £15m at a price per share of 144p.
Developments post flotation
On August 5, 2005, Hardy announced that it had been awarded the KG-DWN-2003/1 (D3) deepwater block with its partner in this block, Reliance Industries Limited. Hardy has a 10 percent interest in this block and Reliance has 90 percent. This area is widely regarded as one of the most exciting offshore exploration areas in India and was heavily contested in the recent bidding round.
On October 21, 2005, Hardy announced the successful acquisition of 3D seismic on CY-OS2 and PY-3.
On December 20, 2005, Hardy had entered into an agreement with a subsidiary of Sinvest ASA (the Deep Drilling Invest Group) for the drilling of two wells on the CY-OS2 block.
Hardy also has a 10 percent interest, with Reliance holding 90 percent, in Block D9 in the Krishna Godavari Basin. The KG basin has produced two significant gas discoveries in the last three years in nearby blocks. About 4,000 Km2 of 3D seismic data has been acquired and is now in the final stages of processing. The 3D has confirmed the presence of 2 distinct, and extensive, four-way structural closures. The 3D has also revealed the presence of a number of seismic amplitude anomalies within these structure closures.
The Company has entered into a placing agreement with Arden Partners Limited, under which Arden has agreed to use its reasonable endeavors to procure placees for 5,204,660 new Ordinary Shares at a price of 283p per share, or failing which, to subscribe itself, as principal, for such shares. The Placing Price represents a discount of 0.5 percent to the official closing market price of 284p of an existing Ordinary Share on February 8, 2006, being the latest practicable date prior to the release of this announcement. The Placing Shares will represent 9.1 percent of the Company's issued share capital immediately following completion of the Placing.
Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that Admission will occur, and dealings in the Placing Shares begin, at 8.00a.m. on February 15, 2006. The Placing Shares will, when issued, rank pari passu in all respects with the existing Ordinary Shares in issue, including the right to receive any dividends and other distributions declared following Admission.
Hardy continues to hold a strategic 8.5 percent shareholding in Hindustan Oil Exploration Co. (HOEC), which has its shares listed on two Indian Stock Exchanges and has a current market capitalization of approximately US$220m. Hardy is engaged in arbitration proceedings with HOEC concerning various terms of a shareholders' agreement. A procedural hearing in this arbitration commenced in London on 6 February 2006 and a ruling on these matters is expected by mid-April. A hearing on various pre-emption right issues in these proceedings is due to be heard in London later this year.
Hardy's current trading is in line with the Directors' expectations and they remain confident about the Company's prospects.
The proposed exploration and drilling timetable is as follows:
- GS-O1 Drill 2 exploration wells Q1/06
- CY-OS/2 Drill 2 exploration wells Q2/06
- D9 Drill 2-4 exploration wells Q3/06
- D3 3D seismic program Q4/06
- Nigeria Various development activity Q2/06
Commenting on the Placing, Sastry Karra, Chief Executive, said:
"We are delighted at this further support from investors, which will help us move forward with the appraisals of our exciting opportunities, aligned with our profitable production activities in the PY-3 region".
- India's Reliance, Partners Abandon East Coast Oil and Gas Block (Dec 24)
- Hardy Wins India Court Decision over Ganesha-1 Discovery (Feb 04)
- Hardy In Talks to Increase Stake Offshore India (Jan 10)