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FAR LTD (ASX: FAR) is into oil and gas exploration and development with high-value assets in Australia and regions of Western and Eastern Africa.
The company today on 2 May 2019 has announced a placement to institutional and sophisticated investors with an objective of raising approximately AU$45 million before expenses via an issue of 818,854,544 million shares. The placement proceeds will be used in funding the ongoing interest in the SNE Field development of FAR, preparatory work for the proposed 2020 drilling program, Australian seismic and processing costs, and general corporate purposes.
The per share placement price is 5.5 cents which represent a 1.8% discount to the last closing share price of the company on 30th April 2019 of 5.6 cents and a 4.9% discount to the volume weighted average share price for the 30 trading days ended 30th April 2019.
The placement shares will rank pari passu with the existing ordinary shares representing approximately 13% of the enlarged share capital of the company, which will have 6,280,387,002 ordinary shares on issue.
The company will apply to the ASX for the placement shares to be admitted for a quotation on the ASX. The settlement of the placement shares is expected to occur in two tranches with the first tranche settling on Tuesday, 7th May 2019 of AU$38.9 million with normal trading to occur on Wednesday, 8th May 2019. FAR will inform the market once the settlement of the second tranche of AU$6.1 million has been completed. The company thanks Bell Potter Securities Limited for their management and book-running services.
In the recent, cash flow and quarterly activities report published by the company for the quarter ended March 2019, it has reported that in February, the contract for the floating production storage and offloading (FPSO) facility was awarded to MODEC International Inc for the conversion of an existing tanker. To allow the integration of subsequent SNE development phases, the floating production storage and offloading will be designed, which includes gas export to shore and subsea tie-backs from other reservoirs and fields going forward.
Also subsequent to the quarter, the Operator announced that Diamond Offshore had been awarded a contract for drill rigs Ocean Blackhawk and Ocean BlackRhino with drilling to begin in the fourth quarter of 2020 and first quarter of 2022. The work scope includes eighteen wells with options for eight additional wells over a combined duration of 4 years.
On the financial front, the cash and term deposits at the end of the quarter stood at AU$20.1 Million, with no debt. There was a cash outflow from operating activities of ~4.39 million with an investing cash outflow of $2.540 for the quarter ended 31 March 2019.
On the price-performance front, the stock of FAR LTD is trading at $0.058 with an approximate increase of 3.57% during the dayâs trade and with a market capitalization of ~$305.85 million (AEST 12:19 PM). The stock has a negative YTD return of 16.42% with negative returns of 53.33%, 3.45% and 1.75% over the past six months, three months and one-month period respectively. Its 52-week high price stands at $0.140 with a 52-week low price of $0.053, and with an average trading volume of ~7.36 million.
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