Thailand’s national oil company, PTT Exploration and Production (PTTEP), has received approval from its shareholders to go ahead with a proposed $3.1bn share sale.
The sale is to fund the company’s recently completed acquisition of Cove Energy for $2.2bn and other expansion costs.
PTTEP expects the investment in Cove Energy will enable the company to boost its reserves, part of a plan to triple its production to 900,000 barrels of oil equivalent each day by 2020, reports Reuters.
Finansia Syrus Securities analyst, Songklod Wongchai, told Reuters that the fund raising would be enough to fund the company’s expansion.
"The long term outlook is positive thanks to the sustained demand for natural gas," Wongchai said.
The company aims to invest $12bn during the next five years and it had planned to offer the shares to all comers. However, it will give priority to existing shareholders in an attempt to get backing for the fund raising.
It also aims to raise money by offering up to 650 million new shares to eligible existing shareholders.
The company will use some of the proceeds to repay a $1.5bn bridge loan and anything remaining will be used for other investments.
Cove Energy holds an 8.5% stake in a Mozambique license in the Rovuma offshore basin and the Cove investment has given PTTEP access to massive gas finds off the coast of east Africa, where it will have to pay for its share of development.
