The Board of Austin Exploration (“Austin” or “the Company”) (ASX:AKK) is pleased to announce that Lanstead Capital L.P. (Lanstead), a UK-based institutional investor, has become a cornerstone investor in Austin via a 19.8% equity investment into the Company. Securing this investor is an important development for the Company. Lanstead have committed their long term-support for Austin and have agreed to hold the stock for a minimum of two years. Lanstead take at least a two year investment view, providing stability to the register and allowing for stock price appreciation.
This placement has no 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 59,000,000 new ordinary shares (“Ordinary shares”) (the “subscription shares”) at a price of $0.0765 per share. A value payment in lieu of a cash fee of 5,900,000 shares will be issued to Lanstead. The Company has issued the Subscription Shares pursuant to Shareholder approval gained at the Company’s 2014 Annual General Meeting.
There are no options attached to this funding agreement. The proceeds raised will enable the Company to continue its high impact, low capital cost drilling program throughout its North American properties, including the ongoing participation in the highly successful and aggressive 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.
As announced to the market on November 3, the Company turned cash flow positive on the back of its Eagle Ford well development program in Texas and its other business units which has led to rapid growth in oil and gas production in 2014.
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