Carbon Energy has secured an offer to refinance its $10 million convertible note via one of its cornerstone investors, the Hong Kong-based Kam Lung Investment Development Co Ltd. This will support the company’s push towards commercial production from underground coal gasification (UCG) in China.

The focus on China comes after the Queensland Government banned UCG in the state six months ago, a decision which put the company’s future in doubt.

However, Carbon Energy has broadened its horizons overseas, backed up by a string of innovations, achievements and support from Queensland’s chief scientist.

Carbon Energy’s keyseam technology, developed in conjunction with the CSIRO in southeast Queensland, is a world-first technology that has succeeded where others have not.

Under recently appointed managing director, well-respected, senior energy, mining and resources executive Kerry Parker, the company is being re-energised to focus its efforts further afield and capitalise on a number of opportunities for its Australian-developed energy technology.

Having last year forged a joint venture in China with Beijing JinHong Investment Co Ltd, Carbon Energy has now secured the offer from Kam Lung. Both companies are headed by Chinese entrepreneur and venture capitalist Huihai Zhuang.

The convertible note will be extended for a further five years on substantially the same terms.

To advance its push towards commercial production in China, Carbon Energy also intends to propose a $5 million rights issue to shareholders at its annual general meeting to be held by mid-December.

Kerry Parker says this will place Carbon Energy in an even stronger financial position as it pursues its repositioning as a resources sector technology specialist and will back its new growth phase.

“Extending the debt facility a further five years and resolving its short-term financial capacity by securing underwriting for our $5 million rights issue are significant milestones that will allow management to focus on progressing the China joint venture with JinHong.

“It will also allow us to pursue additional joint venture and other business opportunities, particularly in Asia and in Europe.

“We appreciate the support that Mr Zhuang is providing and this reinforces the partners’ commitment to progressing the China joint venture,” he said.