Senex Energy and EIG Global Energy Partners will work together to fund the Western Surat Gas Project.
Senex announced earlier this week that the specialist energy investor EIG would become a substantial shareholder, and the companies would work together to establish a funding model to accelerate development of the project.
Senex has conducted a raising of $55 million via a placement to certain EIG-managed funds and other institutional investors at a subscription price of A$0.315 per share.
Senex managing director and CEO Ian Davies said the transactions would provide Senex the strength and momentum to develop and expand its significant upstream positions in both the Surat and Cooper Basins, to address substantial opportunities in the east coast gas market.
“We know the Western Surat Gas Project is a great asset, given our understanding of the subsurface and our ability to operate safely and at low cost,” he said.
“EIG is a respected global energy investor and their support shows they also see the opportunity for Senex to build a significant east coast gas business.”
EIG CEO R. Blair Thomas said the Western Surat Gas Project is in prime position to supply gas into the structurally short east coast gas market.
“EIG has been an early investor in coal seam gas in Queensland since the late 1990s, and we believe now is the opportune time to develop these assets as fundamentals are supportive,” Mr Thomas said.
“Senex has the right people to develop the project and in long-term partnership with EIG we believe the Company will build a tier-one asset.”
Part of the EIG placement is subject to Foreign Investment Review Board approval.
The Institutional Placement will be followed by an offer to all eligible shareholders to participate in a Share Purchase Plan.
The SPP is capped at $40 million.
“We have received strong endorsement for these transactions from our existing institutional shareholder base, reflected in the substantial take-up of the offer alongside EIG,” Mr Davies said.