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Madalena Ventures Raises $7.25 Mln Through Financings

Madalena Ventures (CVE:MVN) has closed the private placement financings it announced last month, raising $7.25 million in total proceeds.

The company issued 11.765 million common shares, issued as "flow through shares", at a price of 34 cents each, for proceeds of $4 million, under an underwriting agreement with Dundee Securities.

It also completed a non-brokered private placement in conjunction with the brokered financing, issuing 200,000 common shares at a price of 31 cents each, 4.78 million flow through shares at a price of 32 cents apiece and 4.89 million flow through shares at a price of 34 cents each, for total proceeds of $3.25 million.

The oil and gas company, with properties in Canada and Argentina, said that certain of its directors and officers acquired a total of 200,000 common shares and 400,000 flow through shares under the non-brokered private placement.

Madalena holds three blocks in the Neuquén Basin of Argentina, which has lately caught the eye of many major oil producers on the hunt for new resources. Indeed, it was recently reported that ExxonMobil (NYSE:XOM) is investing $250 million to explore Argentina's unconventional Vaca Muerta shale, while another mega cap producer, Chevron (NYSE:CVX), also recently said it is driving toward signing an agreement in July for an initial US$1.5 billion deal with YPF for Vaca Muerta shale development.

An independent resource estimate, done by Ryder Scott, earlier this year showed 1.3 billion barrels of oil equivalent gross prospective resources of Vaca Muerta shale potential on Madalena's Curamhuele block - for which it has started a farmout process - and 414 million barrels of oil equivalent of Lower Agrio shale potential.

According to the Ryder Scott resource assessment, there are a total of 2.86 billion barrels of oil equivalent net to Madalena across its three blocks within the Neuquen basin, of which approximately 2.0 billion boe net hails from the Vaca Muerta shale alone.

Aside from the shale assets in Argentina, Madalena is in production in Western Canada, where it holds more than 150 net sections across light oil and liquids-rich horizontal development plays in the Greater Paddle river area.

The company also recently boosted its bank line with the National Bank of Canada to a $10 million revolving facility and a $3 million acquisition line, supporting its capital program this year.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.