Pryme Energy (ASX:PYM) has raised $4 million from a renounceable rights issue, priced at $0.01 per share.
Funds will be allocated to drilling at the Capitola oil project in Texas, which is scheduled to kick-off in September at the first two wells.
The project is located in the west central region of Texas at the edge of the Eastern Shelf of the Permian Basin.
The basin is the largest resource in the U.S. (rig count and recoverable resources).
The farm-in provides up to 75% WI, 56.25% NRI (50% WI in the Cline Shale) in 9,333 acres of oil and gas leases with multiple objectives.
Other operators in region have leased very large tracts of minerals and are drilling many wells in the Cline Shale and other objectives with great success including Devon, Range Resources, Laredo, Firewheel, Gunn.
3 Primary Targets (shallow circa 6,000 feet)
- Breckenridge Lime: (Higher risk huge shallow oil upside potential) – old logs indicate porosity and hydrocarbons, but not proven producer. Could provide substantial upside if commercial flows are proven.
- Canyon Sands: (Low risk foundation of production and cash flow) – down spacing existing produced oil reservoirs and comingling oil and gas shows - old fields, lots of well data, proven producers within acreage.
- Cline Shale: (Medium risk no cost option for Pryme) – being drilled by large offset operators, gives Pryme options for farm out or a significant potential liquidity event in the near future (without Pryme spending money on it).
