88 Energy hails “step change” $25 million raising

Published at Apr 22, 2016, in Energy

88 Energy (ASX | AIM: 88E) has hailed an oversubscribed $25 million placement as a “step change” moment.

The Alaska-focused oil and gas explorer told its shareholders of the placement today, issuing just over 715 million shares at 3.5c each to raise $25 million.

It was originally planned to only raise $10-15 million with a stretch goal of $20 million, but 88E said “due to the high calibre of the proposed investors” and the level of interest in the stock, the board decided to stretch the goal again to $25 million.

Even at $25 million, 88E said, the offer was strongly oversubscribed.

The cash will go towards the funding of a 2D seismic campaign it currently has underway, and payments for the 174,000 acres it picked up as part of a government auction last November.

It will also add general working capital as 88E and joint venture partner Burgundy Xploration go about planning a follow-up to the Icewine-1 well – at this stage being planned as a horizontal well due to spud in the first quarter next year.

That well will give investors greater look through on the production capacity of the target HRZ shale, after Icewine-1 effectively de-risked technical “Achilles heels”.

Managing director of 88E Dave Wall said the strong support for the raising was testament to the technical success it had at Icewine-1.

“The level of support the company received from institutional and sophisticated investors in Australia and the UK is a step change to only a few short months ago, reflecting the substantial de-risking that has occurred at Project Icewine as a result of the recent Icewine-1 exploration well,” he said.

He also said the funding would effectively bring 88E “to the doorstep” of Icewine-2H, the follow-up to Icewine-1.

Earlier this month it outlined bullish numbers from DeGolyer and Macnaughton which indicated that the Icewine project could have as much as 1.4 billion barrels of recoverable oil.

Internal estimates, however, put this figure as high as 3.6 billion barrels.

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of Maven Capital Pty Ltd (AFSL No. 418504). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

Publishers Notice

The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

Facebook
Twitter
LinkedIn