- 88 Energy (88E) completes a placement to raise nearly $24 million which will fund operations at the Peregrine Project in Alaska
- Specifically, 88E plans to use the money to drill the Merlin-2 well, for acreage lease payments, to identify new opportunities and for working capital
- The energy stock will issue over 855.8 million shares at 2.8 cents, which marks a 12.5 per cent discount to the last closing price on August 30
- The company expects to start drilling the Merlin-2 well in the first quarter of 2022
- 88 Energy is trading 1.56 per cent up at 3.3 cents at 12:32 pm AEST
88 Energy (88E) has successfully completed a bookbuild to institutional and sophisticated investors to raise $23.96 million.
Earlier this week the company flagged its plans to raise fresh capital when it entered a trading halt on August 31.
Under the placement, 88 Energy will issue 855,856,369 shares at 2.8 cents per share. The issue price represents a 12.5 per cent discount to the last closing price of 3.2 cents on August 30.
The energy stock will use the placement funds, as well as existing cash reserves, to support the planned Merlin-2 appraisal well, identify and seize potential project opportunities, as well as for acreage lease payments and working capital.
The Merlin-2 well is designed to test the Nanushuk formation to the east where it expects enhanced reservoir thickness and quality. The well is targeting a net entitlement mean prospective resource of 652 million barrels of oil.
88 Energy expects to drill the well in the first quarter of next year.
Managing Director and CEO Ashley Gilbert said the placement positioned the company well to continue drilling plans.
“We’ll continue to evaluate potential strategic partners for the Peregrine Project, in which we maintain a 100 per cent working interest,” he said. “However, ensuring our ability to fully fund Merlin-2 via this placement delivers us excellent commercial leverage and optionality with respect to these discussions.”
Additional activities in the pipeline include unlocking the value of the Yukon acreage, optimising development plans for the historical Umiat oil field and reassessing its Icewine acreage.
88 Energy was trading 1.56 per cent up at 3.3 cents at 12:32 pm AEST.