Melbana Energy has successfully raised $7 million through a discounted share placement with attaching and bonus options, aiming to finance drilling at its Amistad-2 well and support general corporate needs.
- Raised $7 million via placement at $0.017 per share
- Placement includes attaching options exercisable at $0.02
- Bonus options offered for every two attaching options exercised
- Directors participating with $120,000 subscription
- Funds earmarked for Amistad-2 well drilling and corporate purposes
Melbana Energy’s Capital Raise
Melbana Energy Limited (ASX – MAY) has announced the completion of a $7 million placement, issuing over 411 million new shares at a price of 1.7 cents each. This placement was met with excess demand, reflecting investor appetite despite the 22.7% discount to the recent closing price. The fresh capital is intended primarily to fund the company’s upcoming drilling activities at the Amistad-2 production well, alongside supporting general corporate expenses.
Incentivising Investors with Options
Each placement share comes with an attaching option exercisable at 2 cents, set to expire one year from issuance. Additionally, for every two attaching options exercised, investors will receive a bonus option exercisable at 3 cents with a three-year expiry. These options, however, require shareholder approval at an upcoming general meeting, adding a layer of conditionality to the deal. The attaching options are expected to be listed on the ASX, while the bonus options will remain unlisted.
Director Participation and Governance
Notably, Melbana’s directors have committed to participate in the placement, collectively subscribing for $120,000 worth of shares, subject to shareholder approval. This signals confidence from the board in the company’s near-term prospects and the strategic use of proceeds. The placement shares will settle on 26 August 2025 and are expected to commence trading on the ASX the following day.
Strategic Implications for Amistad-2
The capital injection arrives at a critical juncture as Melbana prepares to advance drilling at Amistad-2, a project that could significantly impact the company’s production profile if successful. While the announcement does not provide detailed timelines or production forecasts, the funding underscores the company’s commitment to progressing its exploration and development activities. Investors will be watching closely for updates on drilling progress and subsequent operational milestones.
Looking Ahead
With shareholder approval pending for the options issuance, the next few months will be pivotal. The market will be attentive to the outcome of the general meeting and the potential dilution effects from option exercises. Meanwhile, the successful placement provides Melbana with the financial runway to pursue its drilling ambitions, setting the stage for the next phase of growth.
Bottom Line?
Melbana’s $7 million raise sets the stage for Amistad-2 drilling, but shareholder approval and market reaction remain key watchpoints.
Questions in the middle?
- Will shareholders approve the attaching and bonus options at the upcoming meeting?
- How will the market respond to potential dilution from option exercises?
- What are the expected timelines and outcomes for the Amistad-2 drilling program?