Philippines focused oil and gas explorer Kairiki Energy says it will raise $12.1 million through a partially underwritten renounceable rights issue.

The nine-for-two offer will be priced at 0.1 cents.

Funds raised will be used to retire debt under a convertible note with IMC Oil & Gas Investment, which will also sub-underwrite the rights issue up to $7.7 million.

The balance of funds will be used to for working capital and due diligence on possible acquisitions.

Kairiki holds interests in two service contracts in the Palawan Basin off the west coast of the Phillipines. Nido Petroleum Philippines Pty Ltd is the operator of both contracts.