Bass Oil’s $3.1M Rights Issue Faces Execution and Market Risks Ahead

Rights Issue Overview

Bass Oil Limited has launched a pro-rata, non-renounceable rights issue to raise up to $3.1 million by offering one new share for every three shares held at an issue price of $0.032. Eligible shareholders will also receive one free attaching option for every two new shares subscribed, exercisable at $0.05 until 31 May 2028. The offer closes on 13 June 2025, with shares and options expected to be quoted on the ASX shortly thereafter.

Strategic Use of Funds

The capital raised will primarily fund the recommissioning of the Vanessa gas production facility in Australia’s Cooper Basin, a move that could mark Bass Oil’s entry into the East Coast gas market. Approximately $1.3 million is allocated to this project, including a rehabilitation bond required by South Australian authorities. Another $1 million will finance drilling the Bunian 6 development well in Indonesia’s South Sumatra Basin, aiming to triple oil production from 135 to 435 barrels per day (Bass share), with a payback expected within six months.

Additional funds will support a front-end engineering design (FEED) study for the Kiwi gas field development, evaluation of Triassic gas potential in the northern Cooper Basin, and a deep coal feasibility study. The company also earmarks funds for rights issue expenses and ongoing working capital.

Growth and Operational Context

Bass Oil is debt-free and focused on expanding its footprint in both conventional and unconventional hydrocarbon resources. The acquisition of the Vanessa gas field from Beach Energy is a strategic step to accelerate gas sales and test the commercial viability of a large deep coal gas resource within its Cooper Basin acreage. Meanwhile, the drilling of Bunian 6 is expected to significantly boost Indonesian oil output, leveraging the company’s 55% operated interest in the Tangai-Sukananti KSO.

The company’s broader strategy includes advancing the Kiwi gas field, which holds contingent resources with a net present value estimated at $24 million, and exploring the Triassic gas play. These initiatives align with Bass Oil’s vision to become a leading mid-cap oil and gas producer by unlocking value through targeted development and operational efficiency.

Risks and Shareholder Considerations

The rights issue is not underwritten, meaning full subscription is not guaranteed. Shareholders who do not participate risk dilution of their holdings. The company highlights operational risks typical of oil and gas exploration and production, including technical challenges, regulatory approvals, commodity price volatility, and geopolitical factors, especially given its Indonesian operations. Investors are advised to consider these risks carefully and seek professional advice.

Directors intend to participate in the offer, signaling confidence in the company’s growth prospects. The rights issue also includes a shortfall offer, allowing directors discretion to place any unsubscribed shares, subject to regulatory limits on control.