88 Energy has received commitments to raise $5 million through a share placement to fund the evaluation of the company’s assets in Alaska, including the Charlie-1 appraisal well.
The company said the proceeds raised, together with existing cash reserves of $15.9 million, would be used to fund drilling works next month at the Charlie-1 well, located on one section of Project Icewine.
Proceeds will also be used to identify further opportunities on Alaska’s North Slope oil province.
Under the placement, 88 Energy will issue around 238 million shares at 2.1 cents per share, with Hartleys acting as lead manager and bookrunner to the offer.
88 Energy managing director David Wall said additional funds were needed for several reasons.
“(There was) unsolicited demand for investment at a premium to the most recent placement in September 2019; and a subsequent incremental increase in the well cost due to high grading of the quality of the evaluation program,” Mr Wall said.
Proceeds from the placement will also be used to fund lease rental payments on the company’s Alaskan acreage, 88 Energy said.
It wholly owns 6,000 hectares on the Yukon Gold project and is currently evaluating remaining acreage of the Winx-1 well on the Western Blocks in Alaska, drilled last year.
The Charlie-1 appraisal well, on Project Icewine, is a step out appraisal of a well drilled in 1991 by BP Exploration (Canada), called Malguk-1.
88 Energy has scheduled drilling for February, with flow-testing expected to conclude in April.
Shares in the company were down 7.69 per cent to trade at 2.4 cents per share, at 1:30pm AEDT.
