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L&M Energy completes A$7m placement for gas development

Wednesday 30th June 2010

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L&M Energy has completed a placement of about A$7 million to raise funds to develop its coal seam gas project in Southland.

The company sold about 77 million shares at 9 Australian cents apiece to institutional and sophisticated investors in what it said reflected strong support for its strategy for developing coal seam gas in New Zealand. 

Funds are to be used for production testing and confirming an estimated 2P of reserves at its Ohai Coal Seam Gas project in Southland. The company is considering offering to sell shares on the same terms to existing shareholders via a share purchase plan, it said.

The placement was managed by Philip Capital in Australia and McDouall Stuart in New Zealand.

Funds will also be used to investigate the potential for the development of a micro-LNG facility to fast track coal seam gas extracted in Southland and to meet general working capital, it said. On the NZX, L&M’s shares tumbled 13% to 13 cents today.

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