Australian oil and gas company FAR has announced a fully underwritten placement to institutional and sophisticated investors to raise nearly A$80m ($60.5m) before expenses through the issue of 1,000 million shares.

Proceeds from this placement will be used to fund FAR’s continued participation in the drilling, evaluation and pre-development programme offshore Senegal, the anticipated acquisition and exploration of Blocks A2 and A5 in the Gambia, and general corporate purposes.

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The placement price of 8 cents per share is a 4.8% discount to FAR’s last closing price of 8.4 cents per share at 4 April, and a 3.5% discount to the volume weighted average share price for the five trading days ending 4 April.

After completion, the placement shares will represent nearly 18.3% of the enlarged share capital of the company, which will have 5.4 billion ordinary shares on issue.

"The placement shares will represent nearly 18.3% of the enlarged share capital of the company, which will have 5.4 billion ordinary shares on issue."

Placement shares will be issued in two tranches and will rank equally in all respects with existing ordinary shares.

The first tranche is expected to raise approximately $54m and is unconditional with settlement expected to occur on 10 April and normal trading to occur on the following day.

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The second tranche for balance of approximately $26m is subject to ASX Listing Rule 7.1 shareholder approval that is intended to be considered at a general meeting by 15 May.

Settlement of the second tranche is expected to occur on 18 May and normal trading will occur on the following day.

Credit Suisse is acting as financial adviser to FAR, and the placement is being underwritten by Credit Suisse and RBC Capital Markets as joint lead managers.