Jupiter Energy underpins future growth with strategic investor
Aug 13. Proactive Investors
Jupiter Energy has received a significant boost to its development plans for its Block 31 Triassic reservoirs in Kazakhstan today with the announcement that the Waterford Group, a private holding company, has taken a 13% stake in Jupiter via placement of 132.9m shares @ 2.70 cents per share, raising $3.59 million.
Additional financing initiatives announced could raise a total of $16.7 million. Here’s how.
Jupiter will enter into two Converting Loan Agreements to raise a further $3.91 million, convertible into 144.8m Jupiter shares at 2.70 cents and a 1 for 3 non renounceable Rights Issue priced at 2.70 cents to raise $9.17 million.
Total funds to be raised is expected to be $16.67 million (before costs) and will enable Jupiter to have sufficient working capital to drill well J-51 to enhance production and J-52 to explore a new prospective area of Block 31.
Geoff Gander, Jupiter’s executive chairman, said “the Jupiter Board is delighted to welcome Waterford as a strategic cornerstone investor and we look forward to working with them to continue to develop Jupiter into a leading E&P company in Kazakhstan.”
“Their contacts and expertise in Kazakhstan give us great confidence that they will add significant value to Jupiter at both a Board and operational level.”
Michael Kroupeev, Waterford director, said, “we are impressed with the progress Jupiter has achieved in Kazakhstan to date and believe that with access to increased working capital and some additional experience at Board level, we can, together, add a great deal of value to the company as Block 31 continues to be developed.”
The two Converting Loan Agreements, one with Waterford and a second with Soyuzneftegas Limited (SNG), an unrelated and unassociated party. Conversion of these loans is subject to shareholder approval, and will automatically convert into shares once approved.
The expectation is that these loans will be converted into a further 144.8 million shares (at an effective price of 2.70 cents per share). The Shareholders meeting to approve this conversion will be held in September.
If shareholder approval is not obtained, the loans will be repayable, along with all interest (which accrues at 10% p.a.) and a $1,000,000 establishment fee for each loan.
As part of this fund raising, the company intends to lodge a prospectus in late August 2010 for a 1 for 3 non renounceable Rights Issue, priced at 2.70 cents per share.
This will ensure existing shareholders are able to participate in this overall fund raising at the same price as the placements. The Rights Issue will be fully underwritten by Waterford.
On 13 July 2010, the company received notification of a 37 mmbo (million barrels of oil) increase in the P50 recoverable resources of Jupiter’s Block 31 Triassic reservoirs.
The Jurassic and Triassic formations in Block 31 are now estimated to contain up to 80 mmbo P50 recoverable resources, which is a significant increase from the previously announced 43 mmbo.
The total of independently verified Mid Triassic P50 resources in Block 31 now stands at 58 mmbo recoverable and Jupiter also maintains an internal assessment of the Jurassic prospective P50 resource of 22 mmbo recoverable.
With the combination of the new prospectivity identified on Block 31 and the additional funding being announced today, the company is now more confident that it will be able to develop the permit to the point that its operations will become cashflow positive during 2011.
The company will also invite Waterford to nominate two directors to join the Jupiter Board.
Both Jupiter and Waterford believe that Jupiter should increase its exposure to the European investment community and the new Jupiter Board will explore opportunities to dual list Jupiter on either the Official List or Alternative Investment Market (AIM) in London.
The two organisations were introduced to each other by Perth based Pursuit Capital Pty Ltd, a corporate & strategic advisory group that has followed Jupiter for the past year and first initiated research coverage on Jupiter in March 2010. Pursuit is acting as Lead Arranger and Manager to the Capital Raising.
The key focus for the company in the immediate term is to commence the drilling of J-51, the 2010 commitment well. The new funding package will also enable Jupiter to complete the drilling of J-52, Jupiter’s 2011 commitment well.
Jupiter Energy Limited (ASX: JPR) is an Australian listed oil exploration company that is in the process of migrating to the role of a midsized producer. The Company owns 100% of a permit in the Mangistau Basin, SW Kazakhstan. The Company recently drilled its first new well which was a discovery. It is currently working to bring that well onto production. Export revenues are expected from early in 2H 2010. Further drilling is also planned for 2H 2010. JPR has offices in Almaty and Aktau in Kazakhstan and its corporate headquarters is located in Perth, Australia.