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88 Energy Limited (ASX: 88E) today released its quarterly activities and cash flows report for the three months ended 31 March 2019.
The energy player has taken the farm-out process at Icewine to the next stage with the preferred bidder selected and discussions underway. The Conventional portfolio farm-out deal is targeted in Q2 2019, with the intention to drill an exploration or appraisal well in 2020.
88E has witnessed an attractive third parties interest in the HRZ shale project and therefore it has planned to integrate the data from the existing evaluation into a data room by mid of this year, i.e., 2019, to start a formal farm-out process.
During the period, the company has also secured the approval from Alaska Oil and Gas Conservation Commission (AOGCC) with respect to the Permit to Drill for the Western Blocks â Winx-1 exploration well. According, the Winx-1 exploration well spudded on 15th February, as planned, with the well intersecting all the pre-drill targets safely and efficiently. The explorations reached a total depth of 6,800 having intersected all targets, including the primary Nanushuk Formation Topset objective.
The company has observed low oil saturation in both Nanushuk Topset objectives and the Torok objective under the wireline logging program. Based on the encouraging indication at the early phase, the company undertook the comprehensive wireline program to further evaluate the interval of interest.
On satisfying the requirement of drilling the exploration well on the acreage, 88 Energy have earnt the rights to a 36% working interest on the acreage. Well data was reportedly submitted to the Department of Natural Resources, Division of Oil and Gas in March to initiate the release of the US$3.0 million performance bond, (US$1.2 million net to 88E), having fulfilled the requirement of drilling the exploration well by May 31 2019.
Going forward, the company intends to evaluate and integrate the data collected at Winx-1 as well as reprocess the Nanuq 3D seismic in order to estimate the remaining prospectivity on the Western Leases including the Nanushuk Fairway potential.
At Yukon Acreage, the resource evaluation and interpretation work are currently in process, following the completion of the processing of the Yukon 3D seismic.
The highlights on cash flows for the period include exploration and evaluation expenditure totalled A$8.3 million, primarily associated with the Winx-1 drilling operations. Payments in relation to the debt facility interest totalled A$0.6 million and administration and other operating costs stood at A$0.6 million.
As at the end of the quarter, 88Eâs cash balance was $19.59 million compared to the opening cash balance of $21.72 million as at 1 January 2019. This majorly reflects the cash outflow of $2.10 million from operating activities during the period.
In todayâs trading session, 88E shares are trading flat with a daily volume change of 4.51 million shares. The stock is presently trading at $0.014 with a market capitalisation of $88.64 million as at 18 April 2019 (3:52 PM AEST).Over the past 12 months, the stock has witnessed a negative price change of 69.36% including a plunge of 26.32% recorded in the past three months.
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