An Adelaide-based group is preparing to list on the Australian stock exchange as an oil and gas developer focused on key onshore production areas in the central United States.
The group released plans today for an A$8 million capital raising and backdoor listing by mid-December.
Adelaide-based Pawnee Energy Limited plans to drill 17 horizontal and vertical development and exploration wells in oil-producing provinces in Kansas and potentially Colorado within 18 months of listing on the ASX.
The company will chaired by Beach Energy Chairman, Glenn Davis.
In a statement today, Pawnee said it had entered into agreements with former Sundance Energy founder and managing director, Jayme McCoy, and other private, well-established oil producers in the two states, to acquire low cost acreage acquisitions in tight oil plays with near-term production potential into existing transport, processing and sale infrastructure.
It has set its sights on first oil production in the June quarter next year.
Pawnee plans to backdoor list on the ASX through the shell of currently listed air to water company, Island Sky Australia Limited.
The transactions include in Kansas, an acquisition, and a proposed acquisition to be settled early in December and thirdly, an exploration agreement over 21 counties in southeast Colorado.
The vendor is the private McElvain Energy group, an established Denver headquartered oil house with a long production history in the central US.
“Our strategy is to secure early entry into onshore tight oil resource plays in US areas with excellent infrastructure and which provide the ability to quickly enter production, generate early positive cash flow and expand our focus areas,” Pawnee chief executive elect, Neil Young, said today.
“In particular, Pawnee is not doing its work programs in isolation.
“We have partnered with an experienced Operator, McElvain, to leverage its operational experience, minimise our expenses and be in a position to monetise our assets as the fields mature and without compromising value accretive acquisition opportunities in our two target State.
“Our timing is also right. Recent unconventional oil and gas plays in the United States using horizontal drilling and stimulation to liberate oil and gas in low permeability source rocks, have revolutionised the world oil and gas industry and related energy commodity markets.
“The initial shale gas basins in Texas and oilier plays such as the Bakken and Eagle Ford basins north and south of the Pawnee structures have enabled this equity market sector to generate on-market performance above most energy indices.
“This is because they present strong returns, have an attractive risk profile via a record of few dry holes, and exhibit strong return characteristics including high IRRs and quick payback periods.”
Subject to an Island Sky shareholders’ meeting in Adelaide on November 21, to vote on a change of name and corporate direction, Pawnee will commence listed life with a near totally new Board.
It will be chaired by Davis, Chair of ASX Top-100 Beach Energy; and include non-Executive Directors, McCoy; current Cooper Energy Executive Director and former Beach Energy CEO, Hector Gordon; energy-finance consultant and a former head of Oil and Gas Research at Euroz Securities Limited, Oliver Foster; and retain current Island Sky Australia Chairman and non-Executive Director of Bass Strait Oil, David Lindh.
The November 21 meeting will vote on consolidating Island Sky’s 328.6 million ordinary shares on issue on a 50:1 basis, which if approved, would provide a revised capital structure of 6.571 million shares on issue.
Pawnee plans to issue a prospectus that day to raise around A$8 million through the issue of 40 million ordinary shares at $0.20 cents each. A placement of 4 million escrowed post consolidation shares is also planned to Lateral Energy, a company associated with deal maker, Mr McCoy, who would emerge with a 7.8% stake in the new entity.
Former Island Sky shareholders would own 12.8% of the new oil developer.
