- Blue Energy (BLU) raises $10 million through a share placement to fund a reserve build drilling program at its ATP814 permit in the North Bowen Basin
- The program underpins the company’s non-binding gas supply deals with Energy Australia, Origin Energy (ORG) and Queensland Pacific Metals (QPM)
- These deals will inform construction on a new gas pipeline between Moranbah and the Wallumbilla interconnect
- Despite the raise, shares closed down 12.7 per cent 5.5 cents
Blue Energy (BLU) has raised $10 million through a share placement to fund a reserve build drilling program at its ATP814 permit in the North Bowen Basin.
The company issued close to 200 million new shares at 0.5 cents each to institutional and sophisticated investors and gained strong support.
Notably, the above issue price represents a 15.3 per cent discount to the 30-day volume-weighted average price of Blue Energy shares traded to September 17.
BLU said funds raised would help advance its 2P reserve build program at ATP814, which would in turn underpin its non-binding gas supply Heads of Agreements with Energy Australia as well as ASX-listers Origin Energy (ORG) and Queensland Pacific Metals (QPM).
The program will also inform the economics of the Bowen Gas pipeline, which is intended for construction between Moranbah and the Wallumbilla interconnect.
Additionally, Blue said a portion of funds would be used to advance 2D seismic approvals and acquisitions in the company’s Greater McArthur Basin acreage in the Northern Territory.
Blue Energy’s managing director John Phillips said the company was pleased with the strong level of support shown by investors through the capital raise.
“Clearly, the critical importance of developing new domestic gas supply is apparent to investors and comes as disruption to gas supply is resulting in significant industrial and power generating chaos in the UK and elsewhere,” he said.
“Additionally, strong International LNG spot prices will continue to impact Australian East Coast supply to domestic gas users and therefore price through the Wallumbilla LNG netback price, which is currently $26.44 per gigajoule.”
The placement is expected to settle on September 29, with shares to be allotted on the following day.
Despite the raise, shares closed down 12.7 per cent 5.5 cents.