LONDON (Alliance News) - Leni Gas & Oil PLC Thursday said it has raised GBP7 million through a placing of 200 million new shares, in order to help pay for its acquisition of the Trinity-Inniss oil field in Trinidad and noted that it has already seen good indications of oil from drilling at its GY-667 well.
The oil and gas exploration and production company said the shares were placed at a price of 3.5 pence per share, and the deal will allow it to speed up the closing of its USD5 million Trinity-Inniss oil field buy without drawing down on the it's short-term debt facilities.
Leni Gas & Oil shares were up 0.4% to 3.64 pence on Thursday.
The company said the cash proceeds also will be used for necessary capital for its overall expansion plans in Trinidad and allow it to deploy rigs to Trinity-Inniss without impacting its ongoing 30-well development programme at the Goudron oil field.
"Drilling work at Goudron is continuing to plan, and we anticipate being able to move a work-over rig to the Trinity-Inniss Field immediately after closing the acquisition," Chief Executive Neil Ritson said in a statement.
On Wednesday, LGO said it signed a deal to acquire Fram Exploration Ltd, which holds the Trinity-Inniss Field near LGO's Goudron Field in Trinidad, for a cash payment of USD5 million.
The Trinity-Inniss Field covers an area of 810 acres and is roughly 20 kilometres from the Goudron Field. Its existing production averages between 140 and 150 barrels of oil per day from roughly 25 active wells.
LGO has already identified roughly 20 well reactivation targets, and there is considerable infill drilling potential within the field area, it said. The stock tank oil originally in place at the new field has been estimated at 68 million barrels with a possible upside of 200 million barrels.
The company is currently developing the Goudron Field nearby and has recently started drilling the GY-667 well, which is the fourth of a new development plan on site, after the first three found oil, and the first well reached a stabilised production rate of 240 barrels of oil per day in early June.
On Thursday, LGO said the GY-667 well has reached 1,530 feet in depth and is nearing its first planned casing point at roughly 1,900 feet.
The company said it has already seen indications of significant net oil pay in the Goudron Sands region with extensive oil shows being reported from mud logging.
The primary target for GY-667 is the Gros Morne Sandstone, which is anticipated to start at around 2,300 feet. Further news on Goudron drilling is anticipated in the next week, LGO said.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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