NuEnergy has signed a Letter of Intent with an Asian investor that will result in a cash injection of AU$ 4.3 million and a free carry for exploration wells at the Rengat coal seam gas project in central Sumatra, Indonesia.
Under the agreement, the investor will invest in NuEnergy via a 10% share placement at a price equal to the higher of a 15% discount to the 14 day Volume Weighted Average Price (VWAP) or 4 cents per share, raising a minimum of AU$ 1.3 million.
The investor will also pay NuEnegy US$ 2.7 million in cash plus in addition to providing a free carry on three core and three pilot production wells worth between US$ 10 million and US$ 12 million.
In return for the investment, the company will gain a 49.9% interest in the Rengat CSG project.
The proposed Farm-in Party has extensive experience in the coal seam gas service industry, and with drilling and completion techniques that can significantly enhance the productivity of wells.
Edited from various sources by Katie Woodward