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Quest Petroleum Closes $2.5M Non-Renounceable Entitlement Issue

Quest Petroleum (ASX: QPN) has received subscriptions for about A$888,550 in new shares and will place the remainder of its $2.5 million non-renounceable entitlement issue with the underwriters.

The Issue is part of a broader $5 million capital raising to fund the drilling program at its Ranau production sharing contract (NASDAQ:PSC) onshore South Sumatra.

It offered shareholders one share priced at A$0.006 each for every six held. This includes a free attaching option exercisable at A$0.015 on or before 30 June 2016 for every two shares subscribed.

Quest will issue 146.76 million new shares to shareholders and will place the remaining 263.5 million shares with underwriters Canaccord Wealth Management and Etchell Capital.

The company had previously raised the first A$2.5 million through a placement of shares priced at A$0.006 each to investors including international and domestic institutions. This also included an attaching option for every two shares placed.

Ranau drilling program

Quest is currently preparing to spud the first well in its initial three well program at the Ranau PSC in December this year, subject to rig mobilisation and land access agreements.

The company had received approval from Indonesian upstream regulator BPMIGAS for drilling of its Kayumanis‚Äź1 well in late October.

Kayumanis-1 targets up to 59 million barrels (MMbbl) of oil or 340 billion cubic feet of gas is one of 16 leads identified in the PSC that have combined potential of up to 6 trillion cubic feet of gas and/or 300MMbbl of oil.

The lead is located on the edge of an identified structural high proximate to three significant sub-basins with clear potential for hydrocarbon generation.

Kayumanis-1 targets the Baturaja Limestone and Talang Akar Sandstone Formations, which are the most prolific oil and gas reservoirs in the South Sumatra Basin.

The drill site is on well drained, elevated land adjacent to a paved asphalt road which will facilitate the commencement of drilling and completion.

Based on the results of the Kayumanis-1 Well, two further wells are planned in the initial drilling program. Work is underway on refining the physical drill locations and further details on these will be released closer to spud date.

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