- 88 Energy (88E) reports production of in excess of 400 barrels of oil equivalent per day from its recently acquired Project Longhorn in the Permian Basin, onshore Texas
- The company holds an average net working interest in Longhorn of about 73 per cent
- The production represents an increase of about 30 per cent in production rates since the completion of 88 Energy’s acquisition in mid-February 2022
- Managing Director and CEO Ashley Gilbert says Longhorn “is expected to result in strong cash flow outcomes and further direct exposure to the current high energy prices”
- 88E shares trading 10 per cent higher at 1.7 cents
88 Energy (88E) shares have risen after the company reported production of in excess of 400 barrels of oil equivalent (BOE) per day from its recently acquired Project Longhorn in the Permian Basin, onshore Texas.
The company holds an average net working interest in the oil and gas operation of about 73 per cent.
The production came at the end of last month and represented an increase of about 30 per cent in production rates since the completion of 88 Energy’s acquisition in mid-February 2022.
According to the company, the production increase delivers additional direct exposure to the higher WTI oil price environment and accelerates payback on both the acquisition of the assets and the capital investment in the workovers.
“88 Energy is pleased with the production performance at Project Longhorn, especially in this high oil price environment,” Managing Director and CEO Ashley Gilbert said.
“We are also highly encouraged by the successful delivery by the operator of the first planned workover, as well as the continued progress of the agreed capital development program for 2022. This program is expected to result in strong cash flow outcomes and further direct exposure to the current high energy prices.
“88 Energy is in a solid financial position, with zero debt and a healthy cash balance that is expected to be further strengthened with projected cash flows from Project Longhorn’s Texas production assets.”
The company said Longhorn boasted “exceptionally low operating costs” (lifting costs), which provides high margins from production with the first cash receipts from the project comprising a net payment to 88 Energy of about $600,000.
88E shares were trading 10 per cent higher at 1.7 cents at 10:46 am AEST.