New Standard Energy Limited has reached agreement for a $6.5 million capital raising (Capital Raising) via a $4.5 million two tranche placement of 31.0 million shares at $0.145 per share to institutional and sophisticated investors (Placement) together with a fully underwritten $2.0 million Share Purchase Plan (SPP). Euroz Securities acted as Lead Manager to the Placement and Underwriter to the SPP.

The proceeds from the Capital Raising will be used to fund the ongoing exploration of its Australian shale gas projects, fund New Standard's share of drilling costs associated with its conventional United States Colorado County Project and for working capital.

New Standard Managing Director Sam Willis commented that the strong support for the Placement reflected the company's extensive and emerging shale gas exploration portfolio across the Canning and Carnarvon Basins in Western Australia and the exploration success New Standard has achieved in the United States.

'The shale gas industry in the United States is significant. Tremendous opportunities exist for a similar shale gas industry to develop in Australia, especially in the areas where New Standard holds large exploration footprints over some of the country's most prospective shales,' he said.

'We are appreciative of the very strong support for this Placement and welcome a number of new shareholders to the New Standard share register.

'This capital raising significantly strengthens our balance sheet and leaves us well funded for further exploration and development in the United States and greatly enhances our ability to progress our shale gas projects in the onshore Canning and Carnarvon Basins, Australia.'

Placement The Placement will be made in two tranches: • Tranche one comprising the Placement of 13.7 million shares to raise $A2.0 million, to be issued under the Company's available 15% capacity, and • Tranche two comprising the Placement of 17.3 million shares to raise $A2.5 million, subject to shareholder approval at a general meeting to be held on or around Monday, 6 September 2010.

New Standard directors intend to participate in tranche two of the Placement, subject to shareholder approval at the general meeting.

Fully Underwritten Share Purchase Plan In conjunction with the Placement, New Standard will be offering eligible shareholders the opportunity to acquire additional shares in the Company up to a maximum of $15,000 per shareholder under a share purchase plan (SPP). Shares under the SPP will be offered at A$0.145 per share, which is the same price offered to the Placement participants.

The SPP will be capped at A$2.0 million and is fully underwritten by Euroz Securities. The Company will be seeking shareholder approval at the general meeting to issue any shortfall under the SPP to the underwriter.

Tags: New Standard Energy