88 Energy (88E ), an Alaska-focused explorer, said it plans to raise A$12m (£6.8m) via a placing of ordinary shares at A$0.0095\share (£0.0055\share).

The placing price represents a discount of 20.8% to the 88 Energy's closing price on the ASX on 1 February 2023.  The placing will accommodate oversubscriptions up to A$15m (£8.1m).

88 Energy's shares have been placed on a trading hold on the ASX pending release of an announcement regarding the completion of the placing.

The placing is being conducted through a bookbuilding process managed by Cenkos Securities in the UK and EurozHartleys in Australia. Per ASX rules for this size of placing, shareholder approval will not be required.

 

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88 Energy's proposed placing to raise up to £8.1m will strengthen the company's balance sheet, which indicated A$14.1m (£8.2m) in cash on 31 December 2022.

The new money should accelerate development of the company's flagship 75%-owned Project Phoenix (formerly known as Icewine East) on Alaska's North Slope, specifically the planned Hickory-1 well targeting 647m barrels of oil. Spud of Hickory-1 is scheduled for March 2023 to a permitted depth of 12,500 ft. Hickory-1's final cost is expected to be lower than the previously drilled Icewine-1 and 2 wells on the Project Phoenix acreage at c. US$13.5m gross.

Additionally, the capital will speed up acquisition of the nearby 25,600-acre Project Leonis. Like Phoenix, Project Leonis is strategically located adjacent to the Trans-Alaska pipeline system and Dalton Highway. Leonis targets the Upper Schrader Bluff (USB) reservoir, which has been successfully developed at the nearby Orion, Polaris, West Sak, and Milne Point oil fields. 88 Energy's seismic data indicates the USB prospect appears to be bound by faults on three sides, potentially trapping the oil resource.

88 Energy's assets on Alaska's North Slope. Note that "New Acreage" refers to Project Leonis, and the eastern segment of Icewine has been renamed to Project Phoenix.

The additional working capital should also facilitate 88 Energy's future portfolio expansion. Following the placing, 88 Energy should have sufficient cash to meet its working capital requirements and other expenses for at least 12 months.

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