Green Dragon Gas, a developer of projects to extract natural gas from coal seams on the mainland, has raised US$102.8 million through an institutional share placing.
The London Alternative Investment Market-listed company, which plans to list on Hong Kong's main board next year, placed 8.8 million new shares - equivalent to 7.3 per cent of its existing capital base - at US$11.68 each through investment bank CLSA.
The proceeds, raised from undisclosed institutional investors, will be used to fund the purchase of 25 drilling rigs to add to its existing seven rigs. Their delivery is expected to be completed by the end of next year, which will accelerate its US$250 million two-year drilling programme.
The company's shares closed on Friday on the London secondary board at US$11.85.
Green Dragon aims to raise its annual gas production to 18 billion cubic feet by 2013 from 1 bcf this year. It plans to sell the gas in compressed or liquefied form to be trucked to customers or through pipelines.
The company has six projects, located in Shanxi, Jiangxi, Anhui, and Guizhou provinces, with total geological gas resources of 25.5 trillion cubic feet (tcf).