Beach Drums up Egyptian Acquisition Funds through Capital Raising
Beach Petroleum has placed A$190 million new shares to institutional and sophisticated retail investors. The placement fully funds three previously announced onshore and offshore Egyptian acquisitions in highly prospective Basins, which potentially adds 8 mmb of net 2P oil reserves in FY2009.
The primary focus of the initiative is a A$190 million placement to fully fund Beach's previously announced proposed acquisitions in Egypt and other identified opportunities now under review. The proposed capital raising also includes a Share Purchase Plan and Bonus Options issue.
Potential Egyptian acquisitions
Beach has entered into agreements (subject to various conditions including pre-emption) to acquire interests in the offshore North Shadwan and South East July concessions and onshore North Qarun concession, all in Egypt (as announced to ASX on May 22 and May 30). These interests are non-operated and range between 20-25% of the relevant concession (The Egyptian Acquisitions). The total costs (including estimated development expenses) of The Egyptian Acquisitions will be approximately $150 million.
The 20% interest in the North Shadwan concession is being acquired from TriOcean Energy and is subject to a pre-emptive right in favor of BP Exploration (Delta) Limited, a subsidiary of British Petroleum, (this preemptive right expires June 28).
In addition to the above, Beach is also at an advanced stage of evaluating further opportunities in the Middle East and North African region.
Beach remains focused on its production target of 9 mmboe in FY2009 and on delivering the upside potential in its core Cooper Eromanga, Surat and Gippsland Basin assets. The proposed addition of The Egyptian Acquisitions provides important new growth options for the Company over and above its existing exploration and development activities.
Placement, SPP and bonus options issue
Beach intends to raise approximately A$190 million via a placement of new ordinary shares to institutional and sophisticated retail investors. The placement is expected to be completed by Thursday June 12 following investor presentations to international and domestic institutions. New shares issued under the placement will rank equally with existing shares. Beach will also offer eligible shareholders the opportunity to subscribe for up to A$5,000 worth of shares through a non-underwritten share purchase plan (SPP). Pricing of the SPP will be the same as the pricing of the placement.
In addition, all new and existing eligible shareholders will be entitled to participate in a 1 for 10 bonus options issue, with an exercise price of A$2.00 per share and expiry of 30 June 2010.
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