Energy: Winchester cashed-up for Texas oil hunt
Winchester Energy (ASX:WEL) has received firm commitments for a $6.4m placement to fund accelerated oil exploration and development of its Permian Basin project in Texas.
The placement to institutional and sophisticated investors will be priced at 5c per share, which represents a 14 per cent discount to the 10-day volume weighted average price up to and including November 19, 2019.
Proceeds from the placement will be used to drill lower risk development wells at the Mustang oil field, drill new offset wells on the Lightning prospect and drilling the high impact El Dorado and Spitfire prospects.
“Following recent drilling success at the Mustang Oil Field and the exciting new Lightning Prospect discovery, Winchester has recorded increases in oil production to an average of 506 gross barrels of oil per day, resulting in a significant increase in revenue,” managing director Neville Henry said.
Shares in Winchester rose 10.7 per cent this morning to 6.2c.
Samples from this zone demonstrated increased porosity and oil staining. The company is now preparing to drill the 1800m long horizontal section of the well, which is 600m longer than the horizontal section at Rex-1 and 300m longer than the horizontal section at Rex-2.
Drilling operations are expected to be finished early next week. Earlier this month, the company said it could increase oil production after completing workover operations to remove debris that was blocking about two thirds of the Rex-1 horizonal section.