Karoon completes $150m capital raising

Oil and gas junior raises cash in institutional placement to support farmout talks.

Karoon Gas Australia (KAR) has raised $150 million through an institutional placement in an attempt to shore up its balance sheet amid farmout talks for its oil and gas assets in Western Australia, Brazil and Peru.

The group emerged from a one-day trading halt on Thursday to announce it had completed the placement, which was underwritten and priced at $5.10 a share, an 8.9% discount to the last trading price of $5.60 on 6 August.

After the raising, Karoon had $320 million in cash and was debt free.

Karoon will also run a share purchase plan, capped at $15,000 per shareholder, but is yet to release more details to the market.

Executive chairman Robert Hosking said the strong interest in the placement was "an indication on the level of confidence that the company will continue to deliver further exploration and appraisal success in Australia, Brazil and Peru."

Karoon said the placement would support its rig contract and farmout negotiations and finance drilling activity.

It is running farmouts of its assets in the Browse Basin,  Brazil's Santos Basin and Tumbes Basin, in Peru.

Karoon said 20 interested parties were conducting due diligence or visiting datarooms at the sites.

The placement would provide "the financial flexibility to achieve the best possible outcome on current farmout negotiations", Karoon said.