$2 Million Capital Raise Boosts Surat Basin Oil Production Plans

Capital Raising Details and Share Structure Impact

Australian Oil Company Limited (ASX:AOK) has announced a two-tranche capital raising designed to inject approximately $2.03 million before costs into its Surat Basin operations and broader business activities. The first tranche, raising $925,580, will be completed under the company’s existing placement capacity, issuing over 319 million shares at $0.0029 each to sophisticated and professional investors. The second tranche, which aims to raise $1.1 million, is contingent on shareholder approval and will issue roughly 381 million shares at the same price.

In addition to the shares, the placement includes an offer of 350 million options exercisable at $0.006 each, expiring in June 2028. These options also require shareholder approval. Directors Kane Marshall and Bill Ashby have committed to applying for $30,000 worth of shares in the second tranche, signalling internal confidence in the raise.

Funding Focused on Surat Basin Production and Exploration

The freshly raised capital is earmarked primarily for advancing Australian Oil’s Queensland operations. Key priorities include boosting output from the Emu Apple Oil Field (PL 264) and restarting production at the Riverslea Oil Field (PL 30). Both assets are central to the company’s strategy to convert exploration momentum into tangible production gains. This move follows the company’s recent milestone of its first crude oil lifting from Emu Apple, which highlighted promising exploration signals in the region.

Further funds will support maturation of exploration targets within PL 30 and PL 264, and evaluation studies aimed at restarting production at the Major Gas Field (PL 512) along with other drilling opportunities. The company also plans to allocate resources to assessing new venture opportunities, conducting due diligence, supporting its Californian operations, and covering general working capital requirements.

Placement Management and Shareholder Engagement Plans

Sanlam Private Wealth Pty Ltd acted as lead manager for the placement, receiving a 6% fee on funds raised and, pending shareholder approval, will be issued 110 million options on terms consistent with placement participants. The company also flagged the possibility of a Share Purchase Plan (SPP) to allow retail shareholders to participate on terms no less favourable than institutional investors. While no final decision has been made, the board is considering raising up to $250,000 through an SPP, with directors likely to participate.

Managing Director Kane Marshall emphasised the strong demand from both existing and new investors, highlighting the capital raise as a critical step toward accelerating production and exploration activities in the Surat Basin. The company’s focus remains on translating exploration success into a cornerstone asset, with the capital raise providing the financial muscle to pursue this goal.

This capital raise follows Australian Oil’s earlier operational milestones, including a scheduled first crude oil lifting from Emu Apple Oil Field and a 12-month lifting deal with IOR Energy, which underpin the company’s production and revenue growth strategy in Queensland’s Surat Basin.