Wildhorse Energy raises $7 Million

THE BOURSE WHISPERER: Central Europe-focused ASX-listed Underground Coal Gasification play Wildhorse Energy has entered into agreements with institutional and sophisticated private investors who will undertake a placement of just over 22.6 million ordinary shares at an issue price of 31 cents per share, in order to raise gross proceeds of $7 million.

The placement, undertaken by GMP Europe Securities LLP, sees Genesis Asset Managers, which Wildhorse described as, “a prominent and long established investment manager in the Central European energy sector”, in its announcement take a strategic five per cent interest in the company on behalf of its clients.

Wildhorse will use the funds primarily to advance its Mecsek Hills gas (UCG) project in Hungary.

This will include the conclusion of the pre-feasibility study, targeted for the third quarter this year and completion of the first UCG project site selection.

Wildhorse said the funds will also provide working capital to allow the company to capitalise on its first mover advantage in the European UCG/unconventional gas market and advance the development of the Mecsek Hills uranium project.

“We are reaching a critical time in the development of our flagship Mecsek Hills gas (UCG) project as we near completion of the PFS, and we are naturally delighted with the support we have received,” Wildhorse Energy managing director Matt Swinney said in an announcement.

“In particular, Genesis is a long established and successful investor in the European energy sector and has invested in Hungary for over 15 years.

“Additionally, it has exposure to leading companies specialising in coal conversion technologies, which affords Genesis a good understanding of the general coal gasification and UCG process.

“Having already received strong initial indications regarding the positive economics of supplying syngas to power stations from the project, the next few months will be highly active as we complete our UCG site selection, drilling and 3D seismic programs, with a view to moving into Bankable Feasibility stage by the end of 2011.”

The Wildhorse strategy is to become a major supplier of gas feedstock to power stations in Central Europe.

The company’s project development strategy is based primarily upon acquiring strategic UCG sites in key locations in Central Europe where gas markets are dominated by Russian gas imports, energy security is a major factor for governments and large scale industrial consumers of gas while gas prices are correspondingly high.

The expansion is underpinned by the development of the Mecsek Hills uranium project.