Australia’s former ExxonMobil subsidiary Delhi Petroleum is trying to raise A$250 million from the public through a hybrid offering that pays investors a 11% yield, according to the Australian Financial Review (AFR). (US$1=A$1.45).

Delhi Petroleum holds about 21% of the offshore Cooper and Eromanga Basin oil and gas exploration and production assets.

A Westpac-managed investment vehicle the Australian Energy Income Fund has been issued a $300 million note by Delhi Petroleum that it is replicating, handing a portion to GE Capital and offering the rest to market. The unsecured note should convert into equity after 2008.

UBS is marketing the product, for which GE Capital has already committed an additional $49 million, said the AFR.

While Australian Energy Income Fund is the vehicle from which the hybrids will be issued, if converted they will become equity in Delhi Petroleum.

“As well, the hybrids will amortise over their eight-year life A$100 invested on day one will dwindle to $42 at expiry. But there is an 11% coupon to keep investors happy,” said the AFR.

Earlier this year Westpac backed businessmen Graeme Foley and David Libling in spending A$600 million to buy ExxonMobil’s 21% stake in the Santos-run Cooper Basin oil and gas field, held in the Delhi Petroleum vehicle.

The AFR reported that the partners have plans to make further purchases in the energy sector through their Australian Petroleum Investments vehicle, in which Westpac has a 45% stake.

Westpac, through API, injected about A$27 million of equity into the purchase of the Cooper Basin interest.