LEADING PNG petroleum company Oil Search Ltd has successfully completed a placement to institutional investors and the institutional component of its 1 for 8 accelerated pro-rata non-renounceable entitlement offer to raise approximately A$1,080 million (US$650 million)

Managing Director, Keiran Wulff, said the combined proceeds of the company’s Equity Raising and a separate share Placement are expected to be up to approximately A$1,160 million (US$700 million), excluding estimated transaction costs.

“I would like to thank our shareholders for the strong support they have shown the company during these challenging times,” Mr Wulff said.

“The Placement was substantially oversubscribed and was fully allocated to existing institutional shareholders, the majority of whom have been on the register for many years.

“The proceeds of the Offer, together with our initiatives to reduce costs and manage the potential impacts of COVID-19, will enable Oil Search to not only withstand a prolonged period of low oil prices but also come through the current period of uncertainty strongly, while maintaining safe and reliable operations from our oil and gas assets in PNG. Oil Search is well positioned to deliver our world class growth projects when market conditions improve.

“Oil Search will also utilise the current downturn to undertake value engineering studies on its growth projects, drive breakeven costs down and ensure the company’s cost base, capital management and capability are optimised.”

The Institutional Entitlement Offer had a take up rate of approximately 95% by eligible institutional shareholders (excluding Mubadala, which did not take up its entitlement). The Placement and institutional shortfall was allocated exclusively to existing Oil Search shareholders.

All New Shares offered under the Placement and Institutional Entitlement Offer were issued at the same price, of A$2.10 per share.

Approximately 514 million New Shares subscribed for under the Placement and Institutional Entitlement Offer.

A Retail Entitlement Offer has now been fully underwritten and will raise approximately A$80 million.