Austin Exploration welcomes new cornerstone investor

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THE ROADHOUSE BOWSER: Austin Exploration (ASX: AKK) has welcomed UK-based institutional investor Lanstead Capital L.P. as a cornerstone investor in the company.

Austin said Lanstead’s new standing had come via a 19.8 per cent equity investment into the company.

Lanstead declared its long term-support for Austin by agreeing to hold the stock for a minimum of two years, which Austin said would provide stability to the company register.

Austin explained the deal places restrictions on Austin pursuing and executing other equity and debt funding initiatives.

Lanstead will invest $4.513 million into Austin by way of a subscription for 59 million new ordinary shares a price of 7.65 cents per share.

Austin indicated the proceeds raised will enable the company to continue its high-impact, low capital cost drilling program throughout its North American properties, including its ongoing participation in the Eagle Ford drilling campaign currently underway in Texas.

Drilling operations are currently being completed at the company’s sixth well, the Seaducer 1A well, and drilling of a seventh well is scheduled to commence in coming weeks.

In November, Austin declared itself to be cash flow positive on the back of its Eagle Ford well development program in Texas and its other business units which has led to growth in oil and gas production in 2014.

“We are very pleased to have secured Lanstead as our first cornerstone investor,” Austin Exploration chief executive officer and managing director Mark Hart said in the company’s announcement to the Australian Securities Exchange.

“We have a very busy six months ahead of us with our drilling program in the United States, and we now have the financial flexibility to strengthen our well development program.

“We have worked diligently with Lanstead to structure a finance package that meets our upcoming drilling commitments and allows for additional funding and growth to occur as we bring more wells on-line and substantially ramp up production.”