Newly listed American Patriot Oil & Gas has raised over A$8 million (US$7.5 million) in an initial public offering.
The Melbourne-based company will start trading on the Australian Securities Exchange from Wednesday, listing with 144.2 million shares on issue and a market capitalisation of A$28 million, based on the offer price of A$0.20 per share.
American Patriot said it would use the funds raised in the IPO to develop its assets in the Rocky Mountain basins, in the US, via an extensive programme of lease acquisition.
The company currently holds roughly 56,000 gross acres across five projects which are geographically focused on tight oil exploration and development opportunities in or near old conventional oilfields.
American Patriot’s business model is to capture significant land positions at a low cost and then remove or reduce risk capital exposure through the farm-out of a majority interest to a US operator in a cash and carry deal.
It has already completed its first joint venture agreement at its Northern Star asset in Montana with US private company Treasure Exploration.
Treasure will take over as operator of the asset in exchange for an upfront cash payment on the land and free carry American Patriot through two horizontal wells, with the option for two more wells.
American Patriot said the deal represented a spend of up to A$24 million on the acreage with no cost caps.
“Drilling on our key Northern Star project commences in the next few months with American Patriot free carried on the horizontal well by Treasure Exploration with no cost cap,” American Patriot chief executive Alexis Clark said.
“Success on this project should unlock a significant new tight oil resource project with significant upside to the acreage value from American Patriots low cost entry point.”