Omega Raises A$7 Million at Market Price with Strong Shareholder Backing
Omega Oil and Gas Limited has successfully raised A$7 million in a strongly supported institutional placement, positioning the company to advance its Canyon-1H fracture stimulation and appraisal program.
- A$7 million capital raise completed at market price of $0.315 per share
- Strong backing from major shareholders Ilwella Pty Ltd and Tri-Star
- Funds to bolster balance sheet ahead of R&D tax incentive refund
- Capital to accelerate Canyon-1H fracture stimulation and flowback program
- Placement closed early due to high demand, with some bids scaled back
Capital Raise Overview
Omega Oil and Gas Limited (ASX: OMA) announced on 30 January 2025 the successful completion of a A$7.0 million institutional capital raise. The placement was conducted at the prevailing market price of $0.315 per share, reflecting strong investor confidence without the need for a discount. Demand for the placement was robust, prompting an early close and the scaling back of bids to manage oversubscription.
Shareholder Support and Structure
The capital raise was notably supported by Omega's largest shareholders. The Flannery family's Ilwella Pty Ltd and associated entities maintained their substantial holding at 29.99%, while Tri-Star increased its stake to 19.90%. This continued backing from experienced Australian and international resource investors underscores the market’s positive outlook on Omega’s strategic direction and upcoming projects.
Use of Proceeds
Proceeds from the placement will primarily be used to strengthen Omega’s balance sheet ahead of the anticipated receipt of the FY23 Research and Development Tax Incentive (R&DTI) refund. Additionally, the funds provide flexibility to accelerate the appraisal program contingent on positive outcomes from the imminent Canyon-1H fracture stimulation and flowback operations, scheduled to commence around late February 2025.
Strategic Implications
CEO and Managing Director Trevor Brown highlighted the significance of the Taroom Trough as a potentially large and urgently needed gas supply source for Eastern Australia. The successful capital raise and strong shareholder endorsement signal confidence in Omega’s ability to unlock value from this emerging resource. The upcoming Canyon-1H program represents a critical milestone that could validate the company’s growth trajectory and attract further investment.
Next Steps and Market Impact
Following the placement, Omega will issue shares in two tranches, with the second tranche subject to shareholder approval at an expected general meeting in March 2025. The market will be closely watching the results of the Canyon-1H fracture stimulation and flowback program, which could catalyse a re-rating of the stock if successful. Meanwhile, the company’s strengthened financial position reduces near-term funding risk and enhances operational agility.
Bottom Line?
Omega’s well-supported capital raise sets the stage for a pivotal appraisal phase that could reshape its role in Australia’s gas supply landscape.
Questions in the middle?
- Will the Canyon-1H fracture stimulation deliver the positive results needed to accelerate development?
- How will shareholder approval for Tranche 2 influence Omega’s capital structure and future funding options?
- What impact will the timing and receipt of the R&D tax incentive refund have on Omega’s cash flow and project execution?
