88 Energy (AIM:88E) highlighted in its trading update for the quarter to 30 June 2020 its off-market takeover of XCD Energy Limited this morning in a report for the quarter ended 30 June 2020.
88E initially announced its intention to make an off-market takeover offer to acquire all of the fully paid ordinary shares and listed options on issue in XCD Energy Limited on 27 April 2020.
The takeover will create an oil exploration and appraisal company with a diversified portfolio in Alaska’s North Slope made up of Project Icewine, the Yukon Leases and Project Peregrin, which 88E says will be ‘an attractive investment proposition’ for shareholders.
88E said the diversified portfolio will enhance its overall strategic, commercial, technical and financial strength ‘to optimise funding of operations, including an increased level of liquidity and exposure to a larger global investor base giving greater financing flexibility.’
In addition, the transaction will grant the ability to optimise operational activity across the combined group's highly prospective exploration / appraisal portfolio ‘with potential synergies associated with future project development and infrastructure requirements.’
Shares in 88 Energy opened flat at 0.25p on Tuesday morning.
The group also said discussions were ongoing regarding the Yukon acreage with nearby resource owners seeking to optimise the monetisation strategy of the acreage and that the permitting process for future potential exploration drilling is underway, subject to farm-out.
Meanwhile, 88E is also conducting a formal farm-out process for its Project Icewine in order to fund further appraisal.
In addition, the project’s lease payments have been deferred by the Alaska Department of Natural Resources, giving it a 6-month extension for oil and gas lease rentals due in June, July, and September 2020, and a further 3 months for those due in October and November 2020.
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