Mar 24, 20232 min
Grand Gulf Energy has raised A$2.5mm through a placement of 113.6mm new shares at A$0.022/sh plus 85mm options, to provide working capital to optimise and accelerate the completion and development of Jesse-2 including long lead production equipment, subject to the success of Jesse-2 at the Red Helium Project in Utah. The well is currently drilling ahead, on schedule with managed pressure drilling and monitoring of reservoir gas flow and gas compositional analysis using mass spectrometry. We expect the well to reach TD in around a week. The Jesse#1A well, which proved up a 0.8% helium concentration was not able to successfully flow tested as GGE was unable to isolate water ingress from the lower zone of the wellbore.
Press Release:
Grand Gulf Energy Ltd (ASX:GGE) (“Grand Gulf” or the “Company”) is pleased to advise it has received firm commitments for a placement raising A$2.5 million before costs (“Placement”).
The Placement was well supported by a number of new and existing professional and sophisticated investors and provides Grand Gulf with a strong cash balance to optimise and accelerate production and development of the potentially company-making pure-play helium well, Jesse-2, at the Company’s Red Helium Project in south-east Utah.
Red Helium Project Operational Update
Jesse-2 spudded on 14 March 2023 and is currently drilling ahead, on schedule in the 8.75” intermediate hole section after setting the 9.625” surface hole casing at 3135 feet. The Jesse-2 well is anticipated to take approximately a month in total to reach the projected total depth of 8150 feet true vertical depth subsea in the middle Mississippian Leadville Dolomite formation.
Jesse-2 is exclusively targeting the gas pay zone(s) to minimize the risk of water production, with the planned total well depth terminating at least 50 feet above the identified gas / water contact at the previously drilled Jesse-1A well.
The well design incorporates managed pressure drilling through the primary Leadville formation, allowing for preliminary real-time flow-testing while drilling. The program also minimises formation damage with monitoring of reservoir gas flow and gas compositional analysis using mass spectrometry.
The funding to be raised pursuant to the Placement allows for working capital to optimise and accelerate the completion and development of Jesse-2 including long lead production equipment, subject to the success of Jesse-2.
Placement details
The Placement to professional and sophisticated investors is to be satisfied through the issue of 113,636,363 new shares (“New Shares”) at an issue price of $0.022 per share. The issue of the New Shares will not be subject to shareholder approval and will be made within the Company’s placement capacity under Australian Securities Exchange (ASX) listing rules 7.1A. Settlement is scheduled to occur on Thursday, 30 March 2023.
Euroz Hartleys Limited and CPS Capital Group Pty Ltd are the Joint Lead Managers (“Lead Managers”) to the Placement.
In connection with the Placement, the Company will issue a total of 85,227,273 unlisted options, exercisable at 5 cents each within 3 years of issue (“Options”), comprising 56,818,182 attaching Options to Placement investors on a 1 for every 2 New Shares issued basis, and 28,409,091 Options to the Lead Managers as part consideration for the Lead Manager fees. The issue of the Options will not be subject to shareholder approval and will be issued under listing rule 7.1.