In addition, subscribers for new shares will receive one new option (exercisable at 10 cents on or before 30 September 2013) for every two new shares issued to them. The Company will apply for quotation of the new shares and new options on the ASX.
The Rights issue is fully underwritten by Paterson Securities Limited.
The funds raised will be used to fund the resumption of drilling activity in its Colorado County, onshore Texas project area and to provide additional working capital. A two well drilling is planned and will commence in November 2010:
- Wilcox exploration well - several highly prospective targets are available, and a decision on the actual target will be made shortly. The well is anticipated to spud in early November.
- Heintschel #2 appraisal well - Burleson is committed to commercialising the discovery and delineating the reserve potential in the near-term. Drilling an appraisal well at Heintschel would enable the Burleson to test the resource potential of the discovery, which the Operator AKG believes is in the range of 25.6 Bcf and 58.9 Bcf (and up to 88 Bcf) of potential recoverable gas in addition to 0.45 to 1.07 (up to 1.6) million barrels of associated condensate.
Burleson Energy Managing Director Michael Sandy said "the underwritten rights issue will provide the Company with the capital needed to drive its development program, and allow it to pursue other exploration opportunities at its Colorado County project. This rights issue provides an opportunity for shareholders to expand their interest in the Company, and to share in what we believe is exciting near-term upside in both our Heintschel discovery and Wilcox drilling targets."
In addition Mr Sandy said "We have a fully funded drilling program in place which we are expecting to commence next month, and on completion of the rights issue, we will be in a strong position to pursue further development opportunities."
The Rights Issue will be open to existing Burleson shareholders with registered addresses in Australia and New Zealand.
The Prospectus relating to this Rights Issue is expected to be lodged with ASIC and ASX on 12 October 2010 and will be available after lodgement on the ASX website www.asx.com.au and also on the Company's website http://www.burlesonenergyltd.com.au.
About Burleson Energy Limited:
Burleson Energy Limited (ASX:BUR) has teamed with an experienced Texan oil and gas family (AKG Energy) in the drilling and potential development of hydrocarbons in one of the most valuable energy provinces of America.
BUR listed in May 2006 to acquire a 40% working interest in various oil & gas leases in Burleson County, Texas USA. The Burleson County Properties are located within the prolific Giddings Field area within the Austin Chalk and Georgetown oil & gas trends. Most wells drilled in recent years into the Austin Chalk formation, have discovered gas and condensate.
Late in 2006, BUR embarked on the second phase of asset acquisition by joining with AKG Energy, and major US company, Marathon Oil, to participate in Austin Chalk leases in the Champions area, Grimes and Montgomery Counties, Texas. Combined with some further Champions area leases and acreage in Brazos County - both held by AKG - the new projects provide BUR with at least 7 additional infill development drilling targets. BUR has a 17.5% working interest in these new leases.
BUR's portfolio now consits of a minimum of 25 drilling targets(including 9 firm wells at this stage) providing a continuous drilling programme of at least 18 months, which could extend to several years. Operator AKG is looking to secure a second rig to accelerate the programme.
Contact:Mike SandyManaging DirectorTel: +61-2-9450-2002Fax: +61-2-9986-1753Email: firstname.lastname@example.org://www.burlesonenergyltd.com
Burleson Energy Limited
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