Sirius Petroleum has identified its first marginal oil field opportunity. In the circular sent to shareholders on 23 July 2008 when the Company embarked on its new strategy, Sirius says that it proposed to raise between £500,000 and £2,000,000 in order to pay for technical, legal and financial due diligence on potential acquisition targets.

Now that the Company has progressed identification of its first opportunity, Sirius announces a placing for cash of 18,333,335 new ordinary shares of 0.25p each ("Ordinary Shares") at 6.0p per share (the “Placing") with both new and existing institutional shareholders to raise gross proceeds of £1.1 million (the “Placing Shares") to cover these costs and to provide working capital for the foreseeable future.

Application has been made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM, and dealings in the Ordinary Shares are expected to commence on 8 December 2009. The Placing Shares will rank equally with the Company’s existing issued Ordinary Shares.

Full details of the opportunity will be announced in due course following completion of relevant due diligence.

Sirius’s strategy in relation to marginal oil fields is to negotiate and enter into joint venture partnerships with oil majors and technical partners under which Sirius aims to negotiate opportunities such that:

Sirius will act as the financial partner to the venture and provide 100% of the funding in return for a 40% legal interest in the field; Sirius will hold an entitlement to 88% of net revenues preceding the recovery of the Company’s initial capital investment loan to the project and, thereafter, receive 40% of the revenues generated under the venture; and Sirius will not pay a farm-in fee to enter into the opportunity.

Tags: Sirius Petroleum