Pilot Energy has successfully raised $3.44 million through a placement to fund its Cliff Head operations and emerging carbon capture projects, signalling a strategic push into clean energy transition.
- Placement raised $3.44 million at $0.0036 per share, a 10% discount
- Funds allocated to Cliff Head operations, Capture 6 Direct Air Capture, and corporate costs
- Placement oversubscribed with strong institutional and director support
- Shareholder approval sought for director participation and option issuances
- Pilot aims to leverage oil and gas assets for carbon management and clean energy projects
Capital Raise to Support Strategic Transition
Pilot Energy Limited (ASX, PGY) has announced a $3.44 million placement to sophisticated and institutional investors, priced at $0.0036 per share, representing a 10% discount to its last closing price. The capital raise was notably oversubscribed, reflecting investor confidence in the company’s evolving strategy.
The funds are earmarked primarily to underpin operations at the Cliff Head Oil field, a key asset in Pilot’s portfolio, as well as to advance the Capture 6 Direct Air Capture project, a venture aligned with the company’s pivot towards carbon management and clean energy solutions.
Backing from Directors and Institutional Investors
Significantly, the placement has garnered support from Pilot’s board and management, who have committed to subscribing for approximately $200,000 worth of shares. This participation underscores internal confidence in the company’s direction and the potential value of its projects.
Shareholder approval will be sought at the upcoming Annual General Meeting to formalise director participation and to approve the issuance of attaching and piggyback options linked to the placement shares. These options, while unlisted, offer investors additional upside potential contingent on Pilot’s future performance.
Strategic Focus on Carbon Capture and Clean Energy
Pilot Energy is leveraging its existing oil and gas infrastructure to transition into emerging clean energy markets, including hydrogen and ammonia production for export. The company’s Mid West Clean Energy Project, which includes plans to convert the Cliff Head Oil field into Australia’s first offshore carbon storage facility, exemplifies this strategic shift.
The placement proceeds, combined with funds from the recently announced Three Springs Solar Project development, provide Pilot with a reasonable runway to pursue several corporate transactions. The company anticipates that finalising commercial arrangements related to these opportunities could serve as a significant catalyst for its share price.
Looking Ahead
Settlement of the placement’s two tranches is scheduled for early and late February, contingent on shareholder approval for the second tranche. Bell Potter Securities Limited acted as sole lead manager, further lending credibility to the capital raising process.
Overall, this capital injection positions Pilot Energy to advance its operational and strategic initiatives in a sector increasingly focused on sustainability and carbon reduction, marking a pivotal moment in the company’s evolution.
Bottom Line?
Pilot Energy’s latest capital raise sets the stage for a critical phase in its clean energy transition, with upcoming shareholder decisions and corporate deals poised to shape its future trajectory.
Questions in the middle?
- Will shareholder approval for director participation and option issuances be secured at the AGM?
- How will the dilution impact existing shareholders given the large number of new shares issued?
- What specific corporate transactions is Pilot targeting with this new capital, and what timelines are expected?