Proposed Equity Fundraise

Seascape Energy Asia Plc (AIM:SEA) has announced its intention to raise approximately £4 million through a placing and direct subscription by directors, issuing up to 6,309,781 new ordinary shares at an issue price of 70 pence per share. This price represents a discount of approximately 12.5% to the previous day's closing price of 80 pence. Notably, certain directors plan to subscribe for £315,000 worth of shares, indicating their confidence in the company's future prospects. The fundraising is aimed at supporting Seascape Energy's growth initiatives, including securing new acreage, engaging strategic partners for its Temaris asset, and making final investment decisions on the DEWA and Temaris projects, as well as drilling the Kertang gas prospect.

Since entering the Malaysian upstream sector in 2023, Seascape has established a diverse portfolio of gas fields and exploration prospects. The company operates three core projects: the Temaris Cluster PSC, the DEWA Cluster PSC, and Block 2A PSC. The Temaris Cluster, which Seascape wholly owns, includes the Tembakau and Mengkuang gas discoveries, boasting net certified 2C resources of 276 billion cubic feet (bcf) and significant exploration upside with an additional 950 bcf of prospective resources. The DEWA Cluster, in which Seascape holds a 28% interest, comprises 12 gas-weighted fields with certified net 2C resources of 95 bcf and 1.8 million barrels of natural gas liquids (NGLs). Meanwhile, the Block 2A PSC, where Seascape has a 10% stake, contains the Kertang prospect with certified gross mean unrisked prospective resources of 9.1 trillion cubic feet (TCF) and 145 million barrels of NGL.

The proposed fundraising is critical as Seascape prepares for its next growth phase, which includes securing new acreage around the Temaris asset and bringing in a strategic partner through a farm-out process. The company aims to make a final investment decision on both the DEWA and Temaris projects in the second half of 2026, which will convert a significant portion of its 64 million barrels of oil equivalent (mmboe) of 2C contingent resources into 2P reserves. This transition is expected to facilitate production potential exceeding 20,000 barrels of oil equivalent per day (boepd) by 2028. Furthermore, the drilling of the Kertang gas prospect is anticipated in mid-2027, with the costs covered by INPEX Corporation, Japan's largest E&P company, which has secured a farm-out agreement for the Block 2A PSC.

From a financial perspective, the proposed equity fundraise is designed to bolster Seascape's balance sheet and ensure sufficient capital to advance its growth objectives. The issuance of up to 6,309,781 new shares will increase the total share count by approximately 10%, which could lead to dilution for existing shareholders. However, the directors' commitment to subscribe for shares indicates a level of confidence in the company's strategic direction and future cash flows. The fundraising is expected to provide a financial runway that will enable Seascape to execute its planned activities, including the final investment decisions and drilling operations.

In terms of valuation, Seascape's current market capitalisation stands at £50.4 million. The proposed fundraising, if successful, will inject £4 million into the company, potentially enhancing its enterprise value. To assess Seascape's valuation relative to its peers, it is essential to identify companies operating in the same sector and market cap tier. Direct peers include companies such as Serica Energy Plc (AIM:SQZ), which has a market cap of approximately £50 million, and other similarly sized entities in the oil and gas exploration and production sector. For instance, the EV/EBITDA metric for Serica Energy is around 6.5x, while Seascape's projected growth in production and resources could position it favorably within this valuation framework, especially if it successfully converts contingent resources into reserves.

The execution track record of Seascape Energy is noteworthy, particularly its ability to secure strategic partnerships and advance its projects. The company has demonstrated a clear strategy since its inception in Malaysia, focusing on gas exploration and development. However, the announcement of the fundraising also highlights specific risks, particularly related to the timing of the final investment decisions and the successful execution of drilling plans. Delays in these processes could impact the company's ability to achieve its production targets and secure additional funding in the future.

Looking ahead, the next measurable catalyst for Seascape will be the closure of the accelerated bookbuild process for the fundraising, expected by 7:00 a.m. on 25 March 2026. This event will be crucial in determining the immediate financial health of the company and its ability to advance its strategic initiatives. Additionally, the anticipated final investment decisions on the DEWA and Temaris projects in the second half of 2026 will serve as significant milestones for the company, potentially unlocking further value for shareholders.

In conclusion, the proposed equity fundraise by Seascape Energy Asia Plc is a moderate yet strategically significant move aimed at supporting the company's growth objectives in the Malaysian upstream sector. While the dilution risk from the issuance of new shares is a concern for existing shareholders, the directors' commitment to participate in the fundraising reflects confidence in the company's future prospects. The announcement does not fundamentally alter the intrinsic value of the company but positions it to better execute its strategic plans. Overall, this announcement can be classified as moderate in its materiality, as it provides the necessary capital to support Seascape's ambitious growth trajectory while also presenting certain execution risks that need to be managed effectively.

Key insights

• ●Directors plan to subscribe for £315,000 in shares.
• ●Fundraising supports strategic growth in Malaysia.
• ●Next catalyst: fundraising bookbuild closure on March 25, 2026.

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