State Gas Limited (ASX:GAS) (OTCMKTS:STGSF) is pleased to announce the successful completion of a $5 million placement at $0.15 per share ("the Placement"). The Company also announces a Share Purchase Plan ("SPP") to provide eligible shareholders on the record date, the ability to invest in State Gas up to a maximum of $30,000 at the same price ($0.15 per share) as investors who participated in the Placement. The SPP has the provision to take up to $3 million from eligible shareholders. Both the Placement and the SPP are non-underwritten.

Capital raised from the Placement and SPP will fund the development of key infrastructure at the Rolleston West Project (ATP 2062), that will allow the Company to commence initial production and sale of Compressed Natural Gas (CNG). The Placement allows State Gas to commence immediate construction and commissioning of its Compressed Natural Gas Facility ("CNG Facility") which will enable the sale of CNG from the existing Rougemont 2/3 dual lateral well ("Rougemont 2/3"). The Company expects to increase daily gas production from an initial 0.5TJ/day to 1.25TJ/day through the compression and sale of production testing gas generated from:

1. Rougemont 2/3 which has already demonstrated the ability to produce a minimum of 0.5TJ/day; and

2. A further well which the Company intends to drill prior to December 2023.

Initial production will be facilitated via the Company's virtual pipeline/trucking strategy, which allows CNG to be transported using specialised CNG trailers to local third-party offtake partners and/or delivery into the Gladstone-Wallumbilla gas pipeline (less than 50 km). This initial production will allow the external verification of an initial 2P reserve which the Directors expect will ultimately support the financing of additional in-field pipeline infrastructure to the CNG facility that can enable substantial future expansion to production.

The early sale of gas from Rougemont 2/3 will enable the Company to demonstrate that the Rolleston West Project has the hallmarks of a world class development asset and, importantly, begins to unlock part of the substantial value inherent in the Company's asset base. State Gas is confident that it is on the path to delivering improved returns to shareholders on its existing assets and well positioned to meet increasing demand for gas over the short to medium term.

"Given the domestic gas shortfall coupled with the increased volatility in the gas and electricity markets, this investment positions State Gas to be at the right place at the right time. The demand for gas worldwide continues to grow unabated." said Mr Richard Cottee, Executive Chairman.

Placement Overview

State Gas has raised A$5 million in gross proceeds via a Placement at an issue price of A$0.15 per share (Placement Price). The Placement Price represents a 16.7% discount to the last close price on 31 July 2023 and a 16.8% discount to the 15-day VWAP of the Company's shares up to and including 31 July 2023.

The Company will issue a total of 33,333,334 shares under the Placement consisting of 26,000,000 new shares, raising approximately $3.9 million, under its available placement capacity under ASX Listing Rule 7.1 (Part 1). Subject to shareholder approval at a general meeting of the Company to be held on or around 27 September 2023, a further $1.1 million will be raised through the issue of 7,333,334 new shares to Directors who have participated in the Placement on the same terms as other investors (subject to shareholder approval) (Part 2). Part one of the Placement is expected to settle on or around 14 August 2023 with shares to be issued on 16 August 2023. The second part of the Placement, which is subject to shareholder approval, will settle on or around 28 September with shares expected to be issued on 30 September 2023.

Shares issued under the Placement will rank equally with the Company's other ordinary shares on issue.

Proceeds from the Placement will be used towards funding:

- the construction and commissioning of the Company CNG Facility;
- drilling an additional well;
- repay Director Loans;
- working capital; and
- costs associated with the offer.

Aitken Mount Capital Partners Pty Limited acted as Sole Bookrunner and Lead Manager to the Placement.

HWL Ebsworth acted as legal advisors to the Company.

SPP Overview

Under the capital raising, the Company will also offer existing eligible2 shareholders on the record date, being 7pm AEST on 7 August 2023, the opportunity to participate in the non-underwritten SPP for up to A$30,000 at the same price as the Placement ($0.15) to raise up to an additional $3 million without incurring brokerage fees. The Company intends to open the SPP on 14 August 2023 and a closing date for acceptances of 28 August 2023. Shares under the SPP are expected to be issued on or around 1 September 2023. New shares issued under the SPP will rank equally with the Company' other ordinary shares on issue.

The Company retains the right to scale back applications (in whole or in part) at its discretion, for example because the aggregate amount applied for under the SPP exceeds the $3,000,000 cap or in individual cases, taking into account the size of the eligible shareholder's shareholding at the record date, the extent to which the eligible shareholder has sold or purchased shares since the Record Date, whether the Eligible Shareholder has multiple registered holdings, the date on which the application was made and the aggregate applications received from Eligible Shareholders.

Proceeds from the SPP will be used to fund additional drilling and working capital.

Further information in relation to the SPP, including the terms and condition, is expected to be made available to eligible shareholders in the coming days, together with the SPP Offer Booklet. Eligible shareholders should review the SPP terms and conditions in full before deciding whether or not to participate in the SPP.

To view the Indicative Timetable, please visit:

About State Gas Limited

State Gas Limited (ASX:GAS) is a Queensland-based developer of the Reid's Dome gas field, originally discovered during drilling in 1955, located in the Bowen Basin in Central Queensland. State Gas is 100%-owner of the Reid's Dome Gas Project (PL-231) a CSG and conventional gas play, which is well-located 30 kilometres southwest of Rolleston, approximately 50 kilometres from the Queensland Gas Pipeline and interconnected east coast gas network.

Permian coal measures within the Reid's Dome Beds are extensive across the entire permit but the area had not been explored for coal seam gas prior to State Gas' ownership. In late 2018 State Gas drilled the first coal seam gas well in the region (Nyanda-4) into the Reid's Dome Beds and established the potential for a significant coal seam gas project in PL 231. The extension of the coal measures into the northern and central areas of the permit was confirmed in late 2019 by the Company's drilling of Aldinga East-1A (12 km north) and Serocold-1 (6 km to the north of Nyanda-4).

State Gas is also the 100% holder Authority to Prospect 2062 ("Rolleston-West"), a 1,414 km2 permit (eight times larger than PL 231) that is contiguous with the Reid's Dome Gas Project. Rolleston-West contains highly prospective targets for both coal seam gas (CSG) and known conventional gas within the permit area. It is not restricted by domestic gas reservation requirements.

The contiguous areas (Reid's Dome and Rolleston-West), under sole ownership by State Gas, enable integration of activities and a unified super-gasfield development, providing economies of scale, efficient operations, and optionality in marketing.

State Gas is implementing its strategic plan to bring gas to market from Reid's Dome and Rolleston-West to meet near term forecast shortfalls in the east coast domestic gas market. The strategy involves progressing a phased appraisal prog



Doug McAlpine
Chief Executive Officer
Phone: 0488 007 889

Richard Cottee
Executive Chairman
Phone: 0458 517 850

Link: Successful $5 Million Placement and SPP announced

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