Kinetiko Energy Ltd (ASX:KKO, OTC:KKOEF) is aiming to raise approximately A$5,056,006 (before costs), to be used towards the exploration of its gas opportunities in South Africa, including drilling five wells this year.
The pro-rata entitlement offer of up to 84,266,771 fully paid ordinary shares is at an issue price of A$0.06 per new share on the basis of one new share for every 16 shares held at 5:00pm (AEST) on Monday, May 20, 2024.
The company states the new shares provide a suitable discount to the illiquid and volatile average price of the shares trading on the ASX and to reward long-term shareholders for their support.
Advancing gas exploration
The funds raised will enable the company to aggressively advance its ongoing gas exploration activities.
This includes drilling five appraisal production wells this year, aimed at achieving the highest flow rates and technical outcomes.
Additionally, the funds will be used for general working capital.
Yesterday, Kinetiko became the first company in South Africa to produce power from onshore gas.
Kinetiko successfully demonstrated power production from a gas well at Amersfoort, in cooperation with FFS Refiners, by constructing a fully compliant gas train on-site to feed a 1.2-megawatt (MW) gas generator.
Gas was produced from one existing well, part of the five-well Korhaan cluster in ER271 near Amersfoort.