- 88 Energy has concluded a bookbuild to raise A$23.96 million before costs under a placement.
- The funds raised shall be used for financing the drilling of the Merlin-2 appraisal well and general corporate activities.
- The Merlin-2 well drilling is scheduled to commence in the first quarter of 2021.
88 Energy Limited (ASX:88E) has been expediting work across its exploration assets and had planned numerous activities to be undertaken in the future.
Lately, 88E has announced a share placement to raise A$23.96 million with a view to finance various planned activities.
88E has successfully concluded a bookbuild to local and global institutional as well as sophisticated investors against which 855,856,369 fully paid ordinary shares shall be issued. The issue price for each new ordinary share equals A$0.028, and the shares shall rank equally with the current ordinary shares.
Moreover, the settlement of shares is expected to take place on 9 September 2021, and subsequently, 88E shall have 14,400,403,996 ordinary shares on issue.
Utilising proceeds from the placement
The proposed activities include the proposed Merlin-2 appraisal well, broader acreage lease payments and meeting working capital needs, as well as supporting the work to discover and implement potential new project opportunities.
Previously, 88E achieved a breakthrough via the Merlin-1 program wherein light oil was confirmed, and the Company planned appraisal well for Q1 2022.
Source: 88E Presentation 02 September 2021
The Merlin-2 well is intended to test the Nanushuk formation further to the east, where the Company anticipates improved thickness and quality of the reservoir.
88E is targeting a net entitlement mean Prospective Resource of 652 million barrels of oil through Merlin-2, which is slated for drilling in the first quarter of 2022.
Other Activities for 88E
The coming months have in store the following key activities for 88E:
- The targeted unlocking of value in Yukon acreage via advancing negotiations with nearby resource owners for a joint development area.
- Optimisation of historic Umiat oil field development plans.
- Reassessment of Icewine acreage following the neighbouring Talitha-1 well drilled earlier this year.
Permissions for spud of the Merlin -2 is on schedule - which is early February 2022.
The planning for the follow-up appraisal well, Merlin-2 and the potential farm-out of Peregrine acreage to secure a strategic partner is well underway.
88E believes that its portfolio of exploration assets indicates a strong and compelling investment case with a strong news flow pipeline.
The company seems to be suitably funded with gross proceeds of AU$23.96 million, coupled with AU$14.9 million of current cash reserves (as of 1 September 2021). However, all eyes remain on the Company’s progress and the success encountered during various works.
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88E shares closed at AU$0.035, up by 9.375% on 02 September 2021. They are currently trading at AU$0.036, up by 2.837%, on 3 September 2021 (AEST: 10:52 am).