88 Energy Ltd (AIM:88E, ASX:88E, OTC:EEENF) has in separate statements revealed that its equity fund raise was oversubscribed and informed investors that it has secured a permit to drill the planned Hickory-1 well in Alaska.
The AIM-quoted explorer, in one statement, said it has raised A$17.5mln, up from the A$15mln targeted, from domestic and international institutional and sophisticated investors, as it successfully completed a bookbuild process. New shares are being issued at 0.95 Australian cents per share (0.55p).
Cash proceeds are earmarked for the drilling of Hickory which is located in the Project Phoenix area on Alaska’s North Slope, located in the acreage adjacent to the discoveries made by AIM-peer Pantheon Resources.
"Completion of this placement ensures 88 Energy is fully funded for the drilling cost of the Hickory-1 exploration well and, upon success, a flow test to be carried out during the 2023/24 winter operational season in Alaska,” said managing director Ashley Gilbert in the statement.
88 Energy, in its other statement, told investors that the Alaska Oil and Gas Conservation Commission (AOGCC) has approved the permit to drill.
Meanwhile, the explorer noted that construction of the Hickory-1 ice-pad will commence imminently with mobilisation of the Nordic Calista Rig-2 scheduled to also begin around mid-February - the rig is currently contracted next door, working on Pantheon’s Alkaid-2 well.
With planning and permitting now largely complete the company is anticipating an early March spud date for the exploration well.
The well is estimated to costs US$13.5mln gross (US$10mln net to 88 Energy) which is described by the company as modest – due to its proximity to key infrastructure and the Dalton highway.
Hickory is aimed at some 647mln barrels worth of estimated oil targets, across multiple potential reservoir zones. The well will be drilled down to a depth of 12,500 feet.
If the well is sufficiently successful, it is expected that flow testing will take place in the 2023/24 winter season, the company said, noting that it will have time to optimise the flow test design based on initial findings, along with permitting and implementation.
88 Energy meanwhile said that it will also commit some of its new funds to Project Leonis (its new acreage which is awarded subject to an adjudication process and is due to be formally awarded in the first half of 2023), and, added that it continues to seek other opportunities.
“We continue to pursue additional new ventures, targeting opportunities across the asset life cycle that are complementary to our existing portfolio and provide shareholders with exposure to further value creation potential," the company's managing director Gilbert added.