(MENAFN - ProactiveInvestors - Australia) Red Fork Energy (ASX: RFE) is undertaking an underwritten conditional placement to raise A50 million to allow the company to continue and accelerate an aggressive drilling program over its Mississippian acreage.
The company is planning to issue 74.63 million new shares at 0.67 per share, an 8% discount to the last closing share price, to qualified institutional and sophisticated investors.
Upon completion of the raising, Red Fork will hold cash in hand of 72.2 million, meaning the company will be sufficiently funded as it works to fast track development at its proven oil play.
The company has increased its Mississippian acreage to 75,000 acres (303.5 square kilometres) and now has 10 development areas planned across five key counties in the Eastern Limb of the Mississippian play.
Red Fork has drilled nine horizontal Mississippian wells with four completed for production, three awaiting completion and two currently drilling.
The wells completed for production are delivering strong results.
McMurtry 1-21H well
The company's McMurtry 1-21H well in Development Area 2, Oklahoma, continues to be a winner for the company with production averaging about 470 barrels of oil equivalent per day.
The well has been producing uninterrupted since testing commenced and has been transferred to the company's production monitoring team for permanent production.
Further production from the Mississippi Lime play is just waiting on completion works to be carried out on the McMurtry 1-22H, Bunch 1-19H and State 1-13H wells.
Crude oil deal
Red Fork has recently reached a deal to sell crude oil produced at the Mississippi Lime play to a subsidiary of Phillips 66 (NYSE: PSX).
Oil from its 75,000 acre (303.5 square kilometres) holding in north central Oklahoma will be committed to Phillips 66 for pipeline connection and/or trucking of oil production from that acreage.
Phillips 66 operates one of the world's largest crude oil refining businesses, including substantial oil pipeline assets for its 187,000 barrel-per-day refinery located in Ponca City, Oklahoma.
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