88 Energy Ltd (LON:88E) has unveiled details of a share placing to raise A$17mln of new capital.
The share placing was oversubscribed and it is now issuing 459mln new shares at a price of 3.7 Australian cents (equivalent to 2.3p).
Cash proceeds are earmarked as support for the upcoming Icewine-2 appraisal well in Alaska, as it gives financial flexibility to cover any unexpected costs that may arise from the drill programme.
Additionally, 88 Energy also noted that some cash would cover lease payments relating to its significant, recently awarded new acreage as well as its other ongoing exploration activities.
“As we approach the spud of Icewine-2, it is imperative that the company's balance sheet is managed appropriately to account for worst case scenarios, such as cost overruns on the drilling,” said chief executive Dave Wall.
“In the event that everything goes to plan, the additional capital will be used to further the exploration effort at Project Icewine as we look to unlock the large potential of both the unconventional and conventional plays on the acreage.
“We would like to thank our advisers and shareholders for their continued support as we enter into this critical phase of the project."