88 Energy raises $12m, MD resigns

Perth-based 88 Energy has announced the resignation of its managing director while completing an oversubscribed share placement of $12 million.

The company said it would use the proceeds to cover a potential cost overrun associated with drilling its Merlin-1 well, as part of its Peregrine project on the north slope of Alaska, which 88 Energy acquired through its takeover of XCD Energy mid-last year.

The proceeds will also go towards flow testing at Merlin and plugging and abandonment costs assumed with 88 Energy’s recently acquired Umiat oil field.

The company has also planned a drilling campaign at the Harriet-1 well (at Peregrine).

Meanwhile, managing director David Wall has announced he will leave 88 Energy in May following completion of the drilling and testing programs.

“After more than seven years, my time at the company is coming to an end but there is still so much work to do so it is business as usual,” Mr Wall said.

“With the completion of this placement, the company is now fully funded for all planned activity through to the end of the calendar year.

“While the path to spud of Merlin-1 has been challenging, the prize is more than worth it, and we look forward to commencement of drilling in around three weeks.”

He said the business had targeted a combined 1 billion barrels of recoverable oil from drilling both its Merlin and Harrier prospects.

Mr Wall will be replaced by current chief financial officer and company secretary, Ashley Gilbert, on an interim basis, who has been with 88 Energy since 2017.

Mr Gilbert will also be appointed to the board as an executive director.

Under the placement, 88 Energy will issue 1.5 billion shares priced at 0.8 cents, with Euroz Hartleys acting as lead manager and bookrunner.

Shares in 88 Energy closed down 18.8 per cent to trade at 0.9 cents.