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88 Energy (ASX:88E) progressing well to spud Merlin-2 well in February 2022

Highlights

  • 88 Energy is continuing the preparations for the construction of a snow road for Merlin-2 drilling operations.
  • Commissioning of the Arctic Fox rig is slated for January 2022, with the spud of the appraisal well scheduled for February 2022.
  • 88E is on track with permitting and planning work and expects approval of Permit to Drill around the end of 2021.

88 Energy Limited (ASX:88E) had been actively engaged in commencing drilling at the Merlin-2 well located at its  Project Peregrine.

Previously, 88E had indicated its solid plans to spud the Merlin-2 well in February 2022, with permitting and planning work on track with the schedule. Moreover, 88E had also selected the Merlin-2 well location out of the three initially permitted locations.

RELATED ARTICLE: 88 Energy (ASX:88E) to get drill rods spinning at Merlin-2 well in 2022

Wireframe image showing respective Merlin-1 and Merlin-2 well locations

Source: 88E Announcement 06/12/21

RELATED ARTICLE:  88 Energy (ASX:88E) finalises Merlin-2 appraisal well location

Snow road construction preparations underway

88E is continuing various works, including ongoing preparations for the construction of the snow road, with construction anticipated to begin before the end of 2021, subject to weather conditions. Besides this, 88E has planned a pre-commissioning inspection of the Arctic Fox rig for early January, and an inspection will also be conducted to confirm the excellent condition of the rig before contracting the same.

Doyon’s Arctic Fox - commissioned for the Merlin-2 well

Source: 88E Announcement 06/12/21

88E expects commissioning of the rig to take place after the rig inspection in January 2022 and immediately before mobilising it to the Merlin-2 drill site.

RELATED ARTICLE: What made 88 Energy stock swell up by ~250% over the past year?

Consideration to be paid through issue of new shares

88E has engaged a contractor for the operations at Merlin-2, who offers various services for snow road and drilling management. The contractor has agreed to accept payment in new shares in 88E against invoices worth up to US$7,500,000.

88E believes that this expenditure will be incurred for services related to the Merlin-2 operations, indicating support for the Merlin-2 well proposition and wider Project Peregrine opportunity. Therefore, 88E shall issue 407,650,000 new ordinary shares to the contractor at a price of AU$0.026 per share in consideration.

These shares shall be issued as a pre-payment for services and subject to certain restrictions. Moreover, the shares are also to be held in escrow until approved by 88E.

RELATED ARTICLE: 88 Energy (ASX:88E) bolsters financial stance to expedite activities across exploration assets

On track progress

88E believes that the part payment of Merlin-2 costs via the issue of new shares further bolsters its robust financial position in advance of beginning the Merlin-2 well and planned testing program.

The current progress of the Company remains in line with the anticipation to spud the well in February 2022, with the permit to drill anticipated to be approved and issued by the end of the ongoing year.

88E stock was noted at AU$0.026, up by 1.9% on 6 December 2021. The stock price is constant at AU$0.026 per share on  8 December 2021.

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