Oilex says it will raise $7.09 million in a rights issue for further work at its Cambay project in India.
The two-for-five renounceable rights issue priced at seven cents a share is fully underwritten by lead manager Patersons.
Participants will also receive one attaching option exercisable at 15 cents at any time before September 7, 2015.
Oilex said the funds would be used to drill a high impact offset well and conduct a flow test of the Cambay "Tight" Eocene Reservoirs near the Cambay-76H well, onshore Gujarat in India and for general working capital purposes.
"It is anticipated that the offset well will obtain critical data to demonstrate the commercial viability of the Cambay 'Tight' X and Y zone reservoirs," the company said in a statement.
Oilex's managing director Dr Bruce McCarthy said the results to date from the Cambay-76H well that was drilled and fracture stimulated last year had given the company confidence that the project would be successfully developed.
"While mechanical problems were experienced during milling operations on this proof of concept well, precluding a flow test, these have not downgraded the value of the project in any way," he said.
"The funds that will be raised will enable the Company to drill an offset well to obtain the remaining reservoir flow data that it requires in order to bring the proof-of-concept phase to a conclusion and assess the commercial viability of the very substantial volumes of hydrocarbons in the X and Y Zone tight reservoirs."Oilex shares in a trading halt at 12.15pm, having last changed hands for 9.1 cents.
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