Gina Rinehart Joins Oil Bandwagon, Invests $4.4 Million in Lakes Oil
By Vittorio Hernandez | January 30, 2013 10:06 AM EST
For 2013, oil and gas seem to be the "in" resource in Australia, while iron ore and coal are "out." Even Gina Rinehart, Australia's richest person, is jumping into the oil bandwagon by investing $4.25 million in Lakes Oil (ASX: LKO) by purchasing the company's unsecured notes.
The bulk of the $6.3 million notes issued by Lake Oil were bought by a subsidiary of Hancock Prospecting, owned by Ms Rinehart, Lake Oil reported to the Australian Stock Exchange on Tuesday.
With the buy-in, the unnamed subsidiary would hold a majority 18.6 per cent stake in the company which is searching for gas in the Gippsland basin. It is near the Bass Strait oilfields where BHP Billiton, ExxonMobil and other major oil and gas firms are searching for more of the precious resource.
Ms Rinehart's foray into the oil business came just a week after Linc Energy reported the discovery of a potential vast amount of oil and gas reserves at the Arckaringa Basin in South Australia at a volume that could further boost Australia's economy slowed down by the lower prices of top export commodities such as iron ore and coal in the middle part of 2012.
Ms Rinehart's initial venture into the oil and gas sector also comes months after her unsuccessful bid to have more influence in Fairfax Media board. Ensuring she would have more voice in Lake Oil, among the conditions of her buy-in is the appointed of known climate change skeptic and Hancock Prospecting director, Professor Ian Plimer, as non-executive director of Lake Oil.
Lakes Oil Chairman Robert Annells said the company is an unconventional oil and gas firm, and the oldest of its kind still operating in Australia.
Lakes Oil suffered in 2012 an A$4.91 million shortfall in is capital raising, but Ms Rinehart's entry boosted the energy firm's capitalisation by 50 per cent to A$41.6 million.
Also on Tuesday, Lakes Oil share prices rose 25 per cent or 0.1 of a cent in the afternoon trade on news of Ms Rinehart's buy-in.
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