OIL Search will raise A$895 million (K2.4 billion) in fresh equity capital from institutional investors to help secure cash to fund its share of the massive PNG liquefied natural gas (LNG) project.
The oil and gas company told the Australian stock exchange yesterday that it would raise A$895 million worth of shares at a fully underwritten price of A$5.90 (K15.80) a share from institutional investors.
Oil Search shares went into a halt before the start of trade yesterday and last traded at A$6.75 (K18.07) last Friday.
It also said a share purchase plan for up to A$15,000 (K40,160) would be available to eligible retail shareholders.
The company said the capital raising would help fund its share of the PNG LNG natural gas project.
Oil Search said it had a remaining equity funding requirement at final investment decision for the project of US$1.3 billion (K3.48 billion) through to 2015.
“PNG LNG expansion synergies provide compelling investment return opportunities,” the company said.
Oil Search is expected to have about a 30% stake in the massive PNG LNG project subject to final equity negotiations.
It is a natural gas and liquefied natural gas (LNG) development operated by ExxonMobil in Papua New Guinea, thought to contain about 9.3 trillion cubic feet of resources.
Oil Search said yesterday that discussions with International Petroleum Investment Corp (IPIC) for a potential sale that included a 3.5% interest in PNG LNG had been terminated.
The company said while IPIC, an Abu Dhabi sovereign wealth fund, strongly believed in the project, there had been delays in progressing the transaction.
Oil Search said it had decided to hold a capital raising to secure funding for PNG LNG ahead of the Dec 8 final investment decision target date.
It said funds from the share placement would support a range of growth initiatives concentrating on gas expansion and other areas. – AAP