Key Petroleum (ASX: KEY) is raising up to A$3 million through placement to professional and sophisticated investors to fund the upcoming Cyrene-1 exploration well in the Canning Basin.
Cyrene-1 targets the conventional Willara Formation shallow oil play that could hold 5 million barrels of recoverable oil and the unconventional Goldwyer Shale.
The well in EP 438 is expected to spud in August/September by operator Buru Energy (ASX: BRU).
Key has so far received commitments by professional and sophisticated investors to subscribe for 100 million shares at A$0.028 each, though Key has the ability to raise more than this depending on whether the placement is oversubscribed.
Completion of the placement is expected within the next five business days.
Buru Energy and Key Petroleum will cut a core through the Goldwyer Shale to assess the unconventional oil potential of this play prior to drilling through the target Willara Formation to test for the presence of any moveable oil.
The liquids rich Goldwyer Shale, which is present in large areas of the Canning Basin and the target of New Standard Energy's (ASX: NSE) 3 well drilling program with ConocoPhillips, is believed to have attractive economic parameters that are similar to the North American Bakken and the Eagle Ford shales.
The Willara is thought to contain well developed karsitic porosity analogous to that of other limestone formation reservoirs and a discovery here can be quickly commercialised thanks to its proximity to the Great Northern Highway and port facilities.
Cyrene-1 is operated and partly funded by farm-in partner Buru Energy.
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