Following 88 Energy Ltd’s (LON:88E, ASX:88E) oversubscribed share placing chief executive Dave Wall says risks appetite is returning to the market.
Wall highlights that it is an exciting time for the company, which is preparing for the potentially high impact Icewine-2 well.
The combination of improving market conditions and Icewine’s exciting potential were important factors supporting the successful placing, according to Wall.
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On Monday, 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).
88 Energy raises A$17mln ahead of Icewine-2 drill programme
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Placing to cover any overruns
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."
Drilling pending in Alaska
Last month, 88 Energy confirmed that it had hired a rig contractor and it expected drilling operations will start in the second quarter.
In a statement it said that the drilling rig would be mobilised between March 30 and April 30, once the contracted Arctic Fox rig has completed its current job.
“As soon as the Arctic Fox finishes work associated with its current job, we will be ready to start mobilisation and rig up for Icewine-2. Spud is now scheduled for a few short weeks post our initial plan of late Q1 2017,” Dave said at that time.