88 Energy (LON:88E) is set to start a fully funded drill programme in Alaska in around two months’ time, thanks to a major financing deal with Bank of America.
A US$50m financing has closed, the company told investors.
It comes after 88 Energy raised A$12mln through an equity raise, and it means the proposed drill programme at Project Icewine, on Alaska’s north slope, can now go ahead.
“With 88 Energy fully funded for drilling, the company can now complete the ramp-up of activity related to its first exploration well onshore in Alaska, Icewine 1,” said Dave Wall, 88 Energy’s chief executive
“Anticipated spud is only around two months away and we look forward to updating shareholders on our progress as we aim to unlock a world class oil resource.”
BoA backed Project Icewine after completing detailed due diligence.
As well as being highly prospective and nearby to new and existing fields, the project is also eligible for cash rebates – up to 85% - under an Alaskan government scheme.
Icewine 1 is targeting an unconventional play, known as HRZ. The well is on track to spud in October
At the same time third-party drilling targeting conventional plays - a programme of three or four wells on adjacent acreage in early 2016 - may also provide positives for both the company and its investors.
“The scale of this +$100 million drilling program speaks to the significant potential of the region, and provides multiple opportunities for a considerable re-rating of the value of 88 Energy’s acreage,” Wall added.
“In less than a year from acquisition of the project, the hard work of a talented and dedicated team is on the cusp of realising the culmination of its efforts, resulting in a possible company making event for the shareholders of 88 Energy.”
The terms of the BoA financing requires 88 Energy to make a US$5.7mln equity contribution to the programme.