The Company is pleased to announce that it has signed a non-binding term sheet for a AU$7.5 million equity and convertible note facility with a US based asset management firm. Final binding documents are being prepared that will provide equity based funding of up to $7.0 million spread out over a period of up to 24 months. Convertible notes to be issued upon execution of the binding agreement are expected to raise a further $0.5 million. The Company will make a further detailed announcement upon the execution of the binding agreements.
The execution of these binding agreements, which is anticipated to take place later this month, the facility would immediately provide a total of AU$0.6 million plus an anticipated AU$100,000 to AU$300,000 of equity based funding in each subsequent month over the two year term of the facility. It is intended that the issue of the convertible notes and the equity based drawdowns from this facility will initially utilise the 15% equity placement capacity provided for under ASX Listing Rule 7.1 and subsequently the Company will seek Shareholder approval.
Permian Project
The proceeds from the facility and the recent Entitlement Offering will be used primarily for the continued development of the Permian Project. More specifically, it is anticipated that the new funding will be used for the fracture stimulation of the #5H well this month, the frac completions in the Spraberry Dean intervals for the #1 and #2 wells, along with preparation work for the next round of drilling.
Given the current leases for the Permian Project expire at the end of this month, the Company has elected to extend these leases as provided under the lease agreements. The Company intends to execute a monthly extension for up to four months while the Company's continued work and fundraising for a scaled up drilling program continues. The Company is currently in detailed discussions with several financiers and potential farm-in partners involving the continued development of the Permian Project.
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