Cove Energy ready to spend £25 million

Cove Energy announced this morning a placing of 64,300,000 shares of 1 pence each at 40 pence per ordinary share. They have raised £25.7 million to be allocated towards explorational commitments and working capital. Cove expect the new ordinary shares to trade on AIM on the 15th March, 2010.

The upstream oil and gas company say they will use the new capital  for ongoing commitments in Rovuma Basin, offshore Mozambique as well as for general working capital requirements. Following the success of the Windjammer project thirty miles off the Mozambique coastline in February 2010, the company are said to be looking at two further exploration and appraisal wells as well as the four wells the capital has been set aside for.  These wells will be drilled on the license during 2010 and the start of 2011.

The Windjammer prospect has reportedly encountered more than 480 net feet of natural gas pay in high quality reservoir sands, with a gross column of 1,200 feet. The well will continue to be drilled a further 4,100 feet before reaching its total depth.

Subsequent to completing the Windjammer drill, the company plan to move the rig to the Collier prospect 50 miles south-southeast of the Windjammer. The results from both Windjammer and Collier will determine the shape of the ongoing drill schedule, the company said.

Formely known as Lapp Plats, Cove was incorporated on 15 December 2003 with its primary activity being mineral exploration. The company's current strategy is to focus on geologically driven opportunities by targeting young basins, seismic de–risked prospects, emerging basin preference, joint ventures and large prospects.

To read more about Cove Energy please click here