Firm appeals for exploration cash

By FIONA ROTHERHAM

Investors are being asked to inject $2.5 million into small, unlisted oil firm Spectrum Exploration when it has under a month to find a new partner or risk losing its sole exploration licence.

Fletcher Challenge Energy last week withdrew from its joint venture with New Plymouth-based Spectrum - not the listed miner-turned-e-commerce investor Spectrum Resources.

Fletcher had a 20 per cent interest in a large deepwater petroleum exploration licence off Taranaki, running north and west of the Maui gas field.

Its withdrawal comes as Spectrum, as operator, has to commit by July 21 to drilling a well or dropping the licence.

Spectrum is amending an investment statement and private placement memorandum, released this month, claiming that Fletcher was its "strong joint-venture partner."

It has Securities Commission exemption from issuing a full prospectus for the fundraising.

Ten million partly paid shares are on offer, with 10c payable on application. A second 15c instalment, payable on January 31, will not be called on if Spectrum loses the licence.

The company said it was likely to seek a $15 million initial public offering within two years to finance drilling commitments and interests in new licences.

Fletcher Challenge Energy took the unusual step of disclaiming any comments made in the investment statement.

Spokesman Stephen Jones said the company was continually reviewing its permits and had decided the Spectrum one "no longer fits the portfolio."

Spectrum is left holding 100 per cent of PEP 38462, although it is frantically trying to sell down to 20 per cent in order to raise funds for further exploration.

The company's investment statement claimed 10 parties were doing due diligence on the permit and it hoped to achieve a farm-out by July 21.

Negotiations are continuing with Crown Minerals to extend the drill/drop deadline.

Spectrum was formed in 1997 by chairman Alex McAlpine as a geoscience consultancy.

He was recently joined on the board by former Fletcher business development manager John Bay and former engineering manager Philip Barron.

Reserve estimates for PEP 38462 are said to range from 80 million to 1.5 billion barrels of oil from 16 identified prospects and leads.

Three of them are considered to be near-drillable status.