Australis pitches new oil play
Sean Smith - The West Australian on June 21, 2016, 2:36 am
The team behind one of WA’s biggest takeover success stories is back pitching a new $100 million float to enthusiastic investors.
Australis Oil & Gas, which reunited the management team behind Aurora Oil & Gas, is pre-marketing a long-awaited public offer via an east coast roadshow led by Euroz.
It is believed the company plans to seek about $50 million, which would capitalise it about $100 million.
Australis, formed about 18 months ago, has raised about $35 million in private placements through Euroz since December, much of it from former Aurora shareholders keen to support a reincarnation.
Aurora delivered windfall profits to its backers by accepting a timely $1.8 billion takeover bid from Canada’s Baytex Energy in 2014 before oil markets soured.
Australis has reunited former Aurora chairman Jon Stewart, who pocketed more than $85 million from the Baytex takeover, with the Aurora executive team, including technical director Ian Lusted, finance director Graham Dowland and commercial manager Malcolm Bult.
It has acquired exploration acreage off Portugal and onshore in the US, in the potentially oil rich but unproved Tuscaloosa Marine Shale, between Louisiana and Mississippi.
The group’s counter-cyclical strategy seeks to capitalise on the weak oil market to buy quality energy assets cheaply, potentially replicating the success of Aurora, which bought into the Eagle Ford shale play in Texas before the shale boom.
Australis has no intention of producing in today’s low, albeit improved, oil prices. Instead, the intention is to build a reserve base able to be developed once prices recover.
Last month, it said funds from its most recent placement of $10 million would be used to pay for 50 per cent and operatorship of 13,760ha in the TMS, where it is partnered by Paloma Resources. The Houston-based company is backed by EnCap Investments and Macquarie Mining and Energy Capital.
The Australis float, if finalised, will be one of the few of any note in a local IPO market denuded of opportunities with the weakness in the resources sector in the past few years.