10 October 2018
ASX Limited
Electronic lodgement
Successful Placement for Sacramento Basin Operations
• Xstate is pleased to advise it has received commitments to raise $1.0 million (before costs) by way of a two tranche placement
• Proceeds will be used in part to fund the the Company’s share of operations in the Sacramento Basin and for working capital purposes
• The raising will enable the Company to meet its commitment on the Alvares (Xstate 21% working interest) project subject to the approval of a work program by the joint venture parties and Xstate is now funded for its share of the re-entry well
• Activities are underway to determine how best to evaluate the 1,500 metres of gas shows encountered in the Alvares -1 well
Xstate Resources Limited (ASX: XST) (“Xstate” or “the Company”
is pleased to announce that it has received commitments to raise $1.0 million (before costs) via a private placement to new and existing domestic investors (the “Placement”
.
The Placement will result in the issue of approximately 333.33 million new fully paid ordinary shares in the Company (“Shares”
, at an issue price of $0.003 per share. The Company will also issue Directors and Management with a further 33.3 million shares in return for retiring debts totaling A$100,000 (subject to shareholder approval).
The funds raised will be in part used for the Company's share of operations in the Sacramento Basin, and will also accelerate drilling activities through the Alvares re-entry assessment, subject to joint venture approval. Furthermore, funds will be utilised to maintain existing leases and the connection of additional wells for production and general working capital requirements.
The Placement will comprise two tranches as follows:
• Tranche 1 – comprises approximately 116.67 million Shares, to raise $350,000 to be issued under the Company’s ASX LR 7.1 placement capacity;
• Tranche 2 – comprises approximately 216.67 million Shares, to raise $650,000 and will be subject to shareholder approval at an EGM expected to be held mid November 2018. The Company will also seek shareholder approval for the issuance of approximately 33.33 million shares at $0.003 each to Directors in return for the retirement of $100,000 in fees owed to Directors.
Settlement of Tranche 1 is currently scheduled to take place on 15 October 2018 with anticipated quotation and trading of the new Shares on the ASX on 16 October 2018. Settlement of Tranche 2 is currently scheduled to take place three days after the shareholder meeting to approve the placement.
Patersons Securities Limited acted as Lead Manager to the Placement.
The Board of Xstate is very encouraged by the strong support received in the Company’s capital raising which is an endorsement of the Company’s current portfolio and future growth plans.
We welcome our new shareholders, and we thank our existing shareholders for their ongoing patience and support of the company.
Alvares Conventional Appraisal Project – Xstate 21%
The Alvares Conventional Gas Prospect is an appraisal project testing the Alvares-1 gas discovery drilled in 1982 on a large structure mapped on 2D seismic.
The objective is to test strong natural gas shows in a 1982 well over more than 1,500 metres below a thick, sealing shale at 2,350. Wireline log data from the Alvares-1 well indicates several zones with conventional gas reservoir potential.
The operator advises that regulatory approvals have been obtained and intial program being planned is to test the integrity of the existing casing, then log through the casing to select performation zones and test the main objective.
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