Petroneft share placing raises $43m

IRISH oil and gas exploration company, Petroneft, has raised $43 million (€31.2m), via its second successful share placing in a little over 12 months.

The capital raising effort — via the placing of 63 million shares on London’s AIM and Dublin’s ESM markets — was “substantially” over-subscribed and follows an equally successful $27m raising in September 2009.

Yesterday’s move basically gives the Dublin-headquartered company — which owns two licences in the Tomsk area of Russia, in Western Siberia — the financial muscle to accelerate its planned exploration programme (which covers both of its licences) and further strengthen the overall company’s development.

The latter could see it acquire new assets over the next six-to-12 months; either in the form of smaller locally based exploration companies or new licence opportunities. Either way, it is expected that Petroneft will increase its asset base within that timeframe.

The company already has a stated production target of 4,000 barrels of oil per day (bopd) by early December and is aiming to increase that to 8,000 bopd by the end of next year and to 12,000 bopd by the end of 2012.

The new investment and a faster exploration programme could up those targets still further.

Petroneft’s chief executive, Dennis Francis, said that he was “delighted” at the high level of investor support from both new and existing shareholders and that the combination of year-round oil production and continued development and exploration at the company’s two current licences provides “an excellent base from which we can generate significant cash flow, target significant reserve growth and take advantage of potential acquisition and new venture opportunities in the Tomsk region”.

The company has plans to bring on stream 17 new production wells in 2011 and a similar programme pencilled in for the following year. Yesterday’s news boosted Petroneft’s share price by nearly 10% yesterday, to 55c. b