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88 Energy closes credit facility Funding from the Bank of America, combined with equity, will be used to drill Icewine No. 1 exploration well on the North Slope KRISTEN NELSON Petroleum News
Australian-based 88 Energy Ltd. said Aug. 25 that “definitive binding documentation has been executed with Bank of America” for funding the company’s Icewine project up to $50 million.
The company said that under terms of the agreement with Bank of America it will contribute some US$5.7 million, including its equity contribution toward the authority for expenditures for the well.
Accumulate Energy Alaska, which appears on Department of Natural Resources paperwork for the Icewine project, is a wholly owned subsidiary of 88 Energy. Accumulate is in a joint venture with Burgundy Xploration LLC, which acquired 98,182 contiguous acres of state oil and gas leases near White Hills, an area where Unocal drilled five wells beginning in 2008. As of Aug. 25, all of the acreage was still showing under Burgundy’s name on state leasing records.
Icewine to spud in October 88 Energy said it recently raised A$12 million in equity, which combined with the Bank of America funding ensures full funding for the Icewine No. 1 exploration well, which the company said remains on track to spud this October.
The project as described to DNR’s Division of Oil and Gas in a lease plan of operations is a vertical well, with cores to be taken in both unconventional and conventional resources in lease ADL 392301 some 35 miles south of Pump Station 1.
“With 88 Energy fully funded for drilling, the Company can now complete the ramp-up of activity relative to its first exploration well onshore in Alaska, Icewine #1,” Dave Wall, managing director of the company, said in the company’s Aug. 25 press release.
Wall said the regional drilling program consists of four to five wells. After this year’s well, he said, drilling is planned to continue with three to four wells from early 2016, targeting conventional oil plays adjacent to Icewine. The entire drilling program is estimated to cost some $100 million.
Wall said costs associated with drilling of the Icewine well are eligible for up to 85 percent in cash rebates under the state of Alaska’s credit program.
Franklin Bluffs pad In the lease plan of operations received by DNR, Burgundy said it would use the existing Franklin Bluffs pad and planned to use Nabors rig 105AC, or a rig with similar specifications.
The Division of Oil and Gas said that while Burgundy is currently the lessee of record for the lease where Icewine would be drilled, the company has submitted an application, which is pending, to assign an 87.5 percent working interest to Accumulate Energy. The division said when the application is approved, Accumulate Energy will be the operator of the project. Both Accumulate Energy and Burgundy Xploration are Houston based.
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