Petrel Resources has raised £1,840,500, before expenses, through the placing of 4,090,000 new ordinary shares of 0.0125 Euro at a price of 45p with three long-standing institutional shareholders, who were interested in increasing their stakes. The placing was initiated by one of the institutional shareholders.

The funds will be used as working capital to advance Petrel's projects in Iraqi oil exploration & development, and fully covers Petrel's existing and normally anticipated working capital requirements till end 2010. The placing utilises the Company's existing authorities, it is expected that the shares will be admitted to trading on 14 May 2009. Following the placing there will be 76,664,624 shares in issue.

Iraqi Oil anticipates Renaissance

After an extended period of consolidation which has seen oil production stagnate, the Iraqi oil sector is beginning to overcome its challenges. The regulatory framework is clarifying and it is hoped that there will soon be sufficient legal and constitutional certainty for major investments licensed by the sovereign, elected Iraqi Government under Iraqi law.

The security situation steadily improves and adequate supplier and logistical services are now available.

Petrel continues to work closely with the Iraqi Ministry of Oil on existing contracts to resolve outstanding commercial issues to update the scope of work and schedules in line with changing needs and potential new opportunities.

Petrel's Managing Director, David Horgan, commented, 'The first ten years working in Iraq were the hardest, circumstances steadily improve.

As access and returns shrink elsewhere, Iraqi oil has never been more attractive. Put simply, Iraq offers the perfect package of the lowest exploration costs combined with the lowest production costs anywhere in the world. Iraqi structures are large, oil quality is excellent and exploration success are the best worldwide for massive structures of this type.

The world needs Iraqi oil development urgently: Global oil demand remains resilient. Almost no net oil capacity has been added outside OPEC since 2004. Many exporting countries are in decline. OPEC capacity additions have been slow to appear. There has never been a better time to add major new low-cost capacity.

No western company has more on the ground experience. Whilst we are entirely aware of the challenges that have been and remain inherent with Iraqi operations, we have never had material security; political or geopolitical concerns. We remain committed to working with the sovereign government of Iraq in Baghdad.

This placing, undertaken at the initiative of a longstanding institutional shareholder, shows that Petrel's long-term commitment to working with the Iraqi authorities, to international professional standards, finds City support.'

Tags: Petrel Resources