88 Energy Limited (LON:88E, ASX:88E) has raised A$11mln through the sale of new shares to two US institutional investors.
The cash will strengthen the explorer’s balance sheet ahead of its next well in Alaska, scheduled for first quarter 2017, as well as for complementary growth opportunities and general working capital purposes.
“It is encouraging to receive this level of support from the USA, where Project Icewine is domiciled,” said Dave Wall, 88 Energy managing director.
“The company is now in a stronger position to exploit opportunistic growth opportunities in Alaska and has increased flexibility in regards to upcoming operational activity.
He added: “Progress at the Icewine#2 production test well remains on track for commencement of drilling in 1Q2017, which is now just around the corner.
“Success at Icewine#2 could unlock over 2.5 billion barrels of oil potential for our shareholders and we are, understandably, looking forward to the upcoming well with great anticipation.”
The placing, arranged by US based investment bank Maxim Group LLC, sees some 275mln new shares issued at a price of 4 Australian cents. Additionally, the two investors also receive 137.5mln unlisted five-year share options, which will be exercisable at 5.5 Australian cents.
The placing share will account for some 7.1% dilution to existing shareholders, and the company notes that a further 4% would come if the options are fully exercised.
It is expected that the new shares will be admitted to trading on London’s AIM market on October 31.