UIL Energy debuts with exciting Perth basin position and proven mangement

After turning gas into gold in the east, two of Queensland's most successful energy entrepreneurs are moving their attention to a significant tenement package in the highly prospective Perth Basin.

By InvestSMART · 5 Nov 2014

By InvestSMART ·
5 Nov 2014

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Former Bow Energy CEO John De Stefani and Arrow Energy founder Steven Bizzell are listing oil and gas explorer UIL Energy Ltd (ASX: UIL) on the ASX on Thursday 6 November following a successful capital raising. De Stefani was at the helm of Bow Energy when it sold to Shell and PetroChina for A$535 million, a 72 percent premium to the company’s stock market valuation while Bizzell helped steer Arrow Energy’s market capitalisation from $20 million to $3.5 billion in less than eight years.

UIL Energy is focused on unconventional and conventional plays in Western Australia’s onshore Perth and Canning Basins where the company has secured close to 18,000km2 of exploration acreage.

The recent technical success enjoyed by several Perth Basin operators has increased enterprise valuations with leading institution Citi Research recently placing a valuation of A$200/acre1, a valuation considerably below Cooper Basin multiples which have exceeded A$850/acre1. At listing, UIL Energy will have an implied valuation of under A$30/acre offering investors considerable upside in a producing basin.

Managing Director De Stefani was pleased to see that investors were backing the company’s view that the Perth Basin would be the next hotspot for onshore oil and gas developments, “We are excited about the developments that are now occurring in the Perth Basin and believe that UIL Energy will benefit significantly having one of the largest acreage positions in the Basin.”

“Western Australia is the largest domestic gas market in Australia. Our permits are close to existing infrastructure paving the way for early commercialisation and easier delivery of product to market,” Mr De Stefani said.

In September, AWE announced it had uncovered potentially the largest conventional onshore gas discovery in Western Australia in over 50 years following drilling success at its Senecio field, next door to UIL Energy’s permits in the Perth Basin. A number of other companies including industry heavyweights Origin Energy and Alcoa, the largest gas user in Western Australia, are also exploring the basin’s potential.

The UIL Energy Offer, for 21 million shares at $0.20 per share, raised $4.2 million and places a capitalisation value of $21.6 million on the company. Bell Potter acted as Lead Manager to the IPO inconjunction with Corporate Advisor Bizzell Capital Partners. Simon Hickey, Executive Chairman, along with Mr De Stefani and Mr Bizzell have subscribed for substantial shareholdings in the company, collectively owning 35 percent at listing.

1 Citi Research dated 18 September 2014

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Frequently Asked Questions about this Article…

What is UIL Energy and what makes it an exciting investment opportunity?

UIL Energy is an oil and gas exploration company listed on the ASX, focusing on both unconventional and conventional plays in Western Australia's Perth and Canning Basins. The company offers a promising investment opportunity due to its large exploration acreage and the recent technical successes in the Perth Basin, which is becoming a hotspot for onshore oil and gas developments.

Who are the key figures behind UIL Energy, and what is their track record?

UIL Energy is led by former Bow Energy CEO John De Stefani and Arrow Energy founder Steven Bizzell. De Stefani successfully led Bow Energy to a sale to Shell and PetroChina for A$535 million, while Bizzell helped grow Arrow Energy's market capitalisation from $20 million to $3.5 billion in under eight years, showcasing their proven management expertise.

Why is the Perth Basin considered a promising area for oil and gas exploration?

The Perth Basin is gaining attention due to recent technical successes and discoveries, such as AWE's potentially largest conventional onshore gas discovery in over 50 years. Its proximity to existing infrastructure facilitates early commercialisation and easier delivery of products to market, making it a promising area for exploration.

How does UIL Energy's valuation compare to other basins?

At listing, UIL Energy has an implied valuation of under A$30/acre, which offers considerable upside compared to other basins like the Cooper Basin, where valuations have exceeded A$850/acre. This lower valuation presents a potential opportunity for investors.

What was the outcome of UIL Energy's capital raising effort?

UIL Energy successfully raised $4.2 million through the offer of 21 million shares at $0.20 per share, resulting in a capitalisation value of $21.6 million for the company. This capital raising effort was managed by Bell Potter and Bizzell Capital Partners.

What is the significance of UIL Energy's acreage position in the Perth Basin?

UIL Energy holds one of the largest acreage positions in the Perth Basin, which is significant because it allows the company to capitalize on the basin's growing potential as a hotspot for onshore oil and gas developments. This strategic position is expected to benefit the company significantly.

How does UIL Energy plan to commercialize its gas discoveries?

UIL Energy's permits are strategically located close to existing infrastructure, which paves the way for early commercialisation and easier delivery of gas products to market. This proximity is crucial for efficient and cost-effective operations.

Who are some of the other major players exploring the Perth Basin?

In addition to UIL Energy, other major players exploring the Perth Basin include industry heavyweights like Origin Energy and Alcoa, the largest gas user in Western Australia. Their involvement underscores the basin's potential and attractiveness for exploration.