Norwest's float for Timor exploration

Norwest's float for Timor exploration

SYDNEY (Reuter): Oil and gas hopeful Norwest Energy NL launched a float yesterday to raise A$15 million to explore five prospects in the Timor Sea and Northern Territory.

Norwest said it would offer 75 million or 80 percent of its shares at 20 cents each and use the funds to spend A$13 million to drill five wells in its first two years and conduct a seismic survey.

Norwest chief executive Ivan Burgess told a media briefing that the offer was not underwritten, but that broker BZW Australia had offered to take up as much as A$7.5 million of the issue.

Norwest is the operator and owns a third of the Timor Gap Zone of Cooperation (ZOCA) 96-16 production sharing contract, which is 25 km north-east of the huge Bayu-Undan gas condensate field and 10 km north-east of the Elang Kakatua and North Katatua oil fields.

"At least 12 leads and prospects have been identified with at least one having potential to contain in excess of 100 million barrels of recoverable oil," it said in its prospectus.

Norwest also owns 10 percent of the nearby WA74-P permit, where drilling is due to start on the Schilling well in the Bonaparte Basin at the end of this month.

Petroz NL is the operator and has half of the Schilling 1 well. The Schilling prospect has potential oil reserves of up to 50 million barrels of oil, Norwest said.

Norwest also has a 50 percent interest in the AC/P22 permit in the Ashmore Cartier region in the Timor Sea which contains the Puffin oil field.

The field, where a well has flowed 4,608 barrels per day on test, has potential to contain up to 50 million barrels of oil, it said.

Norwest said it also had a 49 percent interest in the EP-75 area located onshore in the Northern Territory.

The Providence Hill prospect in the area has the potential to contain 80 million barrels of oil, it said.

The offer opens on August 14, closes on September 3 and is expected to list soon after.

Chairman David Kennedy will retain a 20 percent shareholding in Norwest.

Burgess said a national broking firm had also offered to be the lead manager for the float.

The prospectus has measured the net asset backing of the shares at 19 cents per share.

After adjusting for an independent valuation of the petroleum assets to be acquired, the net asset backing is seen in a range of 18 cents to 26 cents per share.

Any surplus cash generated by the company would applied to expanding Norwest's production base, rather than distributed as dividends.

"The aim is to have production within the next two years to ensure the company keeps expanding," Burgess said.