Fremont Petroleum Corporation, Ltd. (ASX: FPL) operates as an energy production company. The Company explores and develops natural gas and crude oil. Fremont Petroleum Corporation serves customers in the United States and Australia.
The company, today on 26 March 2019, has reported that it has completed a two-tranche Placement (“the Placement”) through the issue of 395,171,998 new fully paid ordinary shares to sophisticated and professional investors at $0.013 per share to raise AUD$5.1 million before costs. Bell Potter Securities Limited acted as Lead Manager to the Placement.
The issue price represents a discount of 0.42% to Fremont’s 30-day VWAP of 0.0131c and a discount of 3.60% to Fremont’s 15-day VWAP of 0.0135c. Funds will be used to advance the development of the Company’s 100% owned, 21,500-acre Pathfinder property in Colorado with significant activity planned in the next quarter. These activities include finalising of drilling and undertaking completion works on the Amerigo Vespucci vertical well, again in collaboration with Schlumberger; Undertaking a 3D seismic survey over 4.75 square kilometres (1173acres/1.83 sq. miles) of the Pathfinder Field to assess new production zones; Funding an updated Reserve & Resources report to factor in new production realised from the recently drilled J.W. Powell well and the Amerigo Vespucci well and finally progressing the Company’s gas sales strategy including pre-construction works on gas gathering and pipeline build planning.
Also, the company has released its investor presentation. As per the same, the production success has re-priced Pathfinder’s acreage by a minimum of 5x to potentially 26x. The J.W Powell production proves that its Niobrara acreage should be of enough worth. The management feels that the Pathfinder’s Niobrara Formation is untapped – it is like walking into the Wattenberg Field in the 1970s. The 21,500 acres of Niobrara shale would trade at a substantial premium to the current value per acre. Being 100% owned & operated is a significant value driver, and thus the company has control over every dollar & development.
Fremont’s Executive Director Tim Hart said that the company now has got the financial flexibility to add significant value in the short term. The management expects to be back on location at the Amerigo Vespucci well around mid-April, and they are again collaborating with Schlumberger on an enhanced fracture stimulation and completion program that will be further enhanced from the J.W. Powell program. Further value will also be added through completion of new 3D seismic over a new area at Pathfinder and through the publishing of an updated Reserves & Resources report which is likely to show an increase in the field’s oil and gas resources.
On the price-performance front, the stock has posted the YTD return of 100%. The company also has posted returns of 71.43% over the past six months. At the time of writing (26 March 2019 AEST 04:00 PM), the stock of the company was trading at a price of A$ 0.014, up by 16.667% during the day’s trade with a market capitalisation of ~A$ 15.28 Mn. The stock reached the intraday high of $ 0.016 and touched an intraday low of $ 0.014, with an average daily volume of ~ 28,313,949. It had a 52-week high price of $ 0.019 and a 52 weeks low price of $ 0.005, with an average volume of, 10,457,971 approximately.