[Source: www.*.com.au]Norwest Energy seeks A$5M...

[Source: www.proactiveinvestors.com.au]

Norwest Energy seeks A$5M for Australian, UK exploration
Friday, June 15, 2012 by Bevis Yeo

Norwest Energy (ASX: NWE) is raising A$5 million to fund its Australian and UK exploration activities and now expects the fracture stimulation equipment for its Arrowsmith-2 well to arrive in mid July.



The company is offering eligible shareholders the opportunity to subscribed for up $15,000 worth of shares priced at A$0.05 each.

In the event that the value of applications at closing exceeds A$5 million, then each application will be reduced proportionately and the resultant refund will be sent to the shareholder.

The share purchase plan closes on July 13 and shares issued under the plan will be allotted on July 23.

Proceeds from the raising will also be used to supplement working capital.

Arrowsmith-2 fracture stimulation program

Meanwhile, Norwest said it now expects the Halliburton fracture stimulation equipment to arrive in the Perth Basin in mid-July.

The frac spread is currently in the Cooper Basin completing current project commitments following which it will mobilise to Western Australia.

The fraccing campaign will be carried out in conjunction with AWE's to maximise cost saving benefits by sharing the cost and use of relevant equipment and services.

Norwest will first frac the High Cliff Sandstone formation in the Arrowsmith-2 well (the deepest target at about 3300mmetres). Then while cleanup and flow back is carried out on this zone, the frac spread will be deployed to one of AWE’s two wells in the program.

It will then return to continue the process of fraccing the remaining intervals – the Kockatea Shale, the Carynginia Formation and the Irwin River Coal Measures – in the Arrowsmith-2 well. The frac spread will be continually mobilised between the three wells through the campaign in order to maximise use of the equipment and reduce standby charges.

This program is expected to take up to 8 weeks, with early results expected in the first few weeks along with more solid data being available at the end of the program.

Once the well has been stimulated, the results from the well testing program will enable Norwest to establish the viability of the various target zones for future shale gas production.

Norwest has a 27.945% stake in EP 413.

Analysis

A successful fracture simulation at Arrowsmith-2 could significantly increase Norwest’s valuation to $90-$100 million.

It is also likely to fuel further exploration and appraisal work to unlock the shale gas potential of the Perth Basin, which AWE had estimated at 13 to 20 trillion cubic feet in just the the Carynginia Formation.


Ends.