Sidebar: 88 Energy conducts successful Placement
Kay Cashman Petroleum News
On Nov. 18, 88 Energy announced it has successfully “completed a bookbuild to domestic and international institutional and sophisticated investors to raise up to A$10.07 million before costs (the Placement) through the issue of up to 1,678,333,334 fully paid ordinary shares in the capital of the company … at an issue price of A$0.006 per new ordinary share.” This was done on the Australian Stock Exchange.
88 Energy said that each of its directors intends to participate in the Placement. The company will seek shareholder approval for the directors to participate in the Placement by subscribing for a total of 11,666,667 new ordinary shares.
A shareholder meeting notice will be sent out shortly and made available for shareholders on 88 Energy’s ASX platform (ASX 88E), with the anticipated meeting date for the upcoming general meeting to be towards the end of December. (A notice followed on Nov. 18 with a proposed issue date of Nov. 27.)
The capital raised under the Placement, together with the company’s existing cash reserves (A$4.6 million as at Sept. 30), inclusive of joint venture cash, will be used to fund the ongoing evaluation of the conventional and unconventional prospectivity of the company’s existing assets, including its share of any potential costs in respect to the Peregrine wells, which is due to spud in late February. The capital raised will also enable it to identify and exploit new opportunities on Alaska’s North Slope.
In addition to strengthening its balance sheet, 88 Energy’s Placement will also provide the company with enough capital to do the following:
* Fund well costs for the Project Peregrine wells above an anticipated farm out/carry.
* Pay lease rental payments on the company’s Alaska acreage.
* Fund interest payments on its debt facility.
* Apply funds towards new venture opportunities.
* Finance ongoing working capital requirements and general and administrative overhead costs.
Commenting on the Placement, Dave Wall, managing director of 88 Energy, said: “Completion of this placement positions the company strongly as preparations continue for the drilling of the Merlin 1 and Harrier 1 wells, which will test multiple conventional targets in Q1 CY2021. Final documentation in relation to the Peregrine farm-out with the preferred bidder is progressing.”
- KAY CASHMAN
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