(MENAFN- ProactiveInvestors - Australia) Petroleum (ASX: ELK) substantial shareholder Begley Superannuation Co has increased its interest to 11.52% by participating in a recent share placement.
Begley Superannuation subscribed for a further 1.68 million shares for a total consideration of A$420,000, providing an average entry price of $0.25 per share.
The recent share placement closed oversubscribed, earning Elk $4.25 million to finance expansion of it is Ash Creek development.
The placement was part of a broader $5 million raising, with the remaining A$0.75 million for the project on the border of Wyoming and Montana to be raised through an underwritten share purchase plan.
Elk is preparing to carry out chemical flood injection enhanced oil recovery (EOR) to boost oil output at Ash Creek, which currently produces about 40 barrels of oil per day.
The company has already carried out well workovers with five injection wells and five production wells currently on line awaiting fabrication of chemical injection facilities and completion of testing to determine the most appropriate chemicals to be used. Chemical injection is expected in November this year.
First production from the EOR pilot is expected in the middle of 2013 with output targeted at about 100 barrels per day (bpd) of oil.
Elk will then move to expand the chemical pilot after about 12 months, targeting oil production of 500bpd.
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