88E to raise A$10 million
88 Energy Limited (ASX:88E) this morning advised shareholders that it has successfully completed a bookbuild to domestic and international investors (institutional and sophisticated), which will raise approximately A$10 million.
The company will accrue these funds through the issue of approximately 556 million ordinary shares at A$0.018 per New Ordinary Share. The placement of shortfall shares is from the recently completed Non-Renounceable Rights Issue.
As of 30 September, 88E has cash resources of A$8.1 million (prior to receipt of funds raised from the Rights Issue of circa A$3.6 million).
Funds raised in accordance to the Placement will be combined with existing cash reserves to fund the company’s ongoing evaluation of the conventional and unconventional prospectivity of existing assets, including the drilling of Winx-1 in Q1 CY2019.
88E Managing Director Dave Wall commented on the success of the placement, “We would like to thank our advisers and shareholders for their continued support as we enter a potentially transformational period for the company, which includes a possible farm-out by the year-end followed by the spud of the Winx-1 exploration well in the first quarter of 2019.”
The proceeds will be used on:
- Drilling and/or production testing, if appropriate, at the upcoming Winx-1 exploration well (Q1, CY 2019)
- Ongoing lease rental payments to maintain the current lease portfolio in good standing
- Continued evaluation of geological potential across the asset portfolio
- Fund interest payments on 88E’s debt facility, and
- Finance the company’s ongoing working capital requirements and provide capital for any additional growth initiatives
Hartleys Limited acted as Lead Manager and Sole Bookrunner for the Placement in Australia, while Cenkos Securities plc was 88E’s Nominated Adviser and Sole Broker to the Placement in the UK.
In keeping with the terms of the Rights Issue, the New Ordinary Shares will be issued on or around 20 November, under Exception 3 of ASX Listing Rule 7.2. The issues does not require shareholder approval.
Upon the issue of the New Ordinary Shares, 88E will have 6,331,540,324 ordinary shares on issue, all of which have voting rights.