In a move to supercharge its clean energy transition, ASX-listed Pilot Energy has locked in $5 million of fresh capital through a heavily oversubscribed placement at an impressive 100 per cent premium to its last traded share price.
Pilot will use the funds to shore up its deal to buy a remaining 82 per cent stake off Triangle Energy in the Cliff Head oil project off Western Australia’s Mid West coast, while also powering the company’s broader corporate ambitions to pivot to clean energy.
The Mid-West Clean Energy Project lies at the heart of Pilot’s sweeping plan to produce blue and green hydrogen together with up to 1.2 million tonnes per annum of clean ammonia for export to Asia-Pacific markets.
The company also plans to leverage the existing Cliff Head infrastructure by transforming the legacy oilfield into a cornerstone of WA’s decarbonisation strategy as a 1-million-tonne-per-annum carbon capture storage site.
Pilot will issue 500M new shares to institutional and sophisticated investors at one cent each, together with a listed option sweetener exercisable at 3.3c. Management says the deal received “significant demand” demonstrating growing market confidence in the company's clean energy roadmap and upstream potential.
The raise has been structured in two tranches with $3.24M settling next week and the remaining $1.76M by early June, pending shareholder approval. The board will chip in $455,000, highlighting management’s confidence in the company’s new direction.
Pilot has earmarked $4.5M of the new funds for operations at its mature offshore Cliff Head oil project, 270 kilometres north of Perth. The company currently holds a 21.25 per cent stake in the oilfield but is on track to assume full ownership after it renegotiated a vendor finance deal with Triangle Energy for $5.6M plus interest. The payment is deferred until September next year.
Pilot Energy chairman Greg Columbus said: “The support of existing shareholders and many new investors in this capital raising has enabled Pilot Energy to raise significant funds in a difficult share market environment at a 100% premium to the last traded price demonstrating the value of these unique assets.”
Pilot recently inked a landmark project development deal for the company’s Mid West Clean Energy Project with a powerhouse consortium of South Korean energy giants, spearheaded by Korea Southern Power Co.
The group shows strong interest in taking an equity position in the project and is backed by substantial South Korean government funding.
Although the agreement is non-binding at this stage, the partnership is expected to deliver a binding deal including front end, engineering and design plans by July.
Management sees the partnership as a major leap towards unlocking a reliable supply of clean ammonia. Korea’s energy juggernauts are already eyeing it as a crucial fuel for hydrogen co-firing in the country’s coal-fired power plants.
Not wanting to sit on its laurels, Pilot has been looking for more ways to squeeze even more value out of the project. It is about to flick the switch on a government-backed carbon capture and water treatment pilot program with cutting-edge United States tech player Capture 6.
Pilot also owns the WA-481-P oil and gas permit in the shallower offshore waters of the Northern Perth Basin.
The company recently revealed a massive 250 per cent resource uplift to 1.1 trillion cubic feet of gas at its Leander prospect within the permit, encouraging the company to begin plans for a formal farm-out process to secure an exploration funding partner.
According to management, Leander shares similar characteristics to the prolific onshore Perth Basin gas discoveries of Waitsia, Erregulla and Lockyer Deep.
Should a discovery be made at site, Pilot says the prospective resources could supply the company with enough gas to feed its planned ammonia plant for more than 30 years.
With cash now in the bank, a boardroom reinvigoration complete and strong external interest in its clean energy ambitions, Pilot appears poised for a breakout year. From traditional oil to transformative green projects, the company is straddling two energy eras as it starts what could be a lucrative low-carbon journey.
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By James Pearson
