OilVoice - Caithness Announces Completion of Fundraising and Awards of New Acreage

Caithness Announces Completion of Fundraising and Awards of New Acreage

Monday, November 09, 2009

Caithness Petroleum Limited, the privately owned British independent petroleum exploration and production company with assets in the UK North Sea, onshore Morocco and in Texas, USA, is pleased to announce:
a) that it has raised over US$58 million, at a post money valuation of $600 million, through a placing of new ordinary shares to existing shareholders and new investors, including two leading City institutions. This valuation represents an increase in the Company’s share price from US$29.80 at the time of the placing in August 2007 to US$56.79, an uplift of over 90%.
b) Caithness has added two new blocks to its acreage portfolio, the first onshore Morocco and the second in the UK North Sea.

The Company’s Moroccan subsidiary, Cabre Maroc Limited, (“Cabre Maroc”) has been awarded a one year reconnaissance licence over the Taounate area in Morocco. This lies immediately to the north-east of the Company’s Fès exploration permit and is believed to comprise an extension of the geological plays in the Fès block. The Taounate block covers an area of approximately 4,660 km2 and is largely unexplored. Cabre Maroc is Operator and holds a 75% interest in the licence. The remaining 25% is held by ONHYM, the Moroccan state oil company. When the licence expires, Caithness and ONHYM will have the right to apply for an eight-year exploration permit over the area. Cabre Maroc has arranged to acquire an airborne gravity / gradiometry survey, to identify and map structures in the Taounate licence area.

In addition, the Company’s wholly owned, UK subsidiary, Caithness Oil Limited, has been awarded Licence P1624 over block 23/26c in the United Kingdom Continental Shelf’s 25th licensing round. Two prospects have been identified on the block, which lies some 250 kilometres east of Aberdeen in an area close to producing fields. Caithness and its partner, Reach Exploration (UK) Limited, each hold a 50% interest in the block, where Caithness is the Operator. The companies are interpreting 3D seismic surveys over the block to complete mapping of the structures in preparation for future drilling.

Robert Kennedy, Chief Executive Officer, commented:
"The new funds raised, together with our current cash balances, will enable us to complete the drilling of the L11/24-3 well on the Lybster field in the UK North Sea and operations on our Fès exploration permit, where we started drilling in autumn 2008. We also plan further seismic acquisition in the Inner Moray Firth to prove up some prospects identified by an earlier survey and intend drilling a number of production wells in the Barnett shale oil and gas play in the United States, where we acquired leases in 2008.

We are delighted that, despite these challenging times, the assets held by Caithness have proved attractive to investors who have continued to give us their support. The new acreage awards complement our existing portfolio and we look forward to continuing operations with our partners, ONHYM and Reach Exploration."