Drillsearch Energy Limited (ASX:DLS) Announces A$48 Million Capital Raising

Drillsearch Energy Limited (ASX:DLS) (PINK:DRLLF) is pleased to announce an equity capital raising (Capital Raising) to raise gross proceeds of approximately A$48 million. The Capital Raising consists of:

- a placement to institutional investors of 29.4 million fully paid ordinary shares (Shares) at an offer price of A$0.51 per Share (Placement Price) to raise A$15.0 million (Unconditional Placement);

- a placement to institutional investors of 31.4 million Shares at the Placement Price of A$0.51 per Share to raise A$16.0 million (subject to shareholder approval at a general meeting expected to be held on or around 17 June 2011) (Conditional Placement); (together, the Placement); and

- a 3 for 20 fully underwritten, non-renounceable, pro rata entitlement offer to existing eligible shareholders (Entitlement Offer) at an issue price of A$0.48 per Share (Entitlement Price) to raise an additional A$17.0 million.

The Placement Price of A$0.51 per Share represents a 12.8% discount to the last closing price of Drillsearch Shares (A$0.585) prior to entering a trading halt while it conducted the Placement, and a 15.0% discount to the five-day volume weighted average price prior to entering a trading halt.

Wilson HTM Corporate Finance Ltd is the Lead Manager of the Capital Raising and underwriter of the Entitlement Offer.

Drillsearch will use the proceeds from the Capital Raising primarily to progress the PEL 91 oil exploration and development program, develop the PEL 106B wet gas pilot project and undertake a broad exploration program across Drillsearch's oil, wet gas and unconventional businesses. Further details of the use of proceeds from the Capital Raising are contained in Drillsearch's presentation lodged with the ASX on 16 May 2011.

Drillsearch shareholders eligible to participate in the Entitlement Offer will shortly receive an entitlement offer booklet and a personalised entitlement and acceptance form which will provide further details of how to participate.

Further details relating to the Entitlement Offer, including the eligibility criteria for participation, the ability of eligible shareholders to apply for additional shares in excess of their entitlement, and the timetable for the Entitlement Offer, are set out in Annexure A. (see link: http://www.abnnewswire.net/media/en/docs/67480-ASX-DLS-634553.pdf)

The Conditional Placement is subject to obtaining shareholder approval at a general meeting of shareholders to be held on or around 17 June 2011.

About Drillsearch Energy Limited

Drillsearch Energy Limited (ASX:DLS) explores and develops conventional oil and gas projects. Drillsearch has a strategic spread of petroleum exploration and production acreage in Australia's most prolific onshore oil and gas province, the Cooper/ Eromanga Basins in South Australia and Queensland. The company's focus is on 'brownfields' exploration where geological risk is reduced and there is access to existing infrastructure, ensuring that any discoveries can be brought into production. The company also has offshore exploration interests in the Gippsland Basin and in PNG as well as oil & gas production interests in Canada.

 

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