Cue to fund Sumatra gas buy

Cue to fund Sumatra gas buy

WELLINGTON (Reuter): Cue Energy Resources said it had set up a share placing to raise about A$21 million after it agreed on Monday to buy an interest in the Jambi Merang Block prospect in Sumatra, Indonesia, from Saga Petroleum Indonesia Jambi AS, a unit of Norway's Saga Petroleum.

The equity funding will support part of a total purchase price for the block of US$27 million inclusive of drilling supplies, and the balance will be funded by debt, Cue said.

In a statement it added that the equity portion was fully underwritten by ANZ Securities with shares priced at A$0.23.

The placement of a minimum of 91.3 million shares would be issued to a range of existing and new institutional investors.

The acquisition of the prospect, part of Saga's withdrawal from Indonesia, is subject to Indonesian government approvals as well as the approval of Cue shareholders.