It will also pay for lease rental payments for the Alaskan acreage, interest on debt, and support new venture activity, 88 Energy added.
A total of 238mln new shares are being sold to investors at a price of 2.1 Australian cents, equating to 1.1p per share – versus a London market price of 1.23p.
"The decision by the board to raise additional funds at this time was for several reasons, namely: unsolicited demand for investment at a premium to the most recent placement in September 2019; and a subsequent incremental increase in the well cost due to high grading of the quality of the evaluation program,” said Dave Wall, 88 Energy managing director.
“We would like to thank our advisers and shareholders for their continued support as we enter into this critical phase.”
Premier is paying up a total of US$23mln to drill Charlie which is designed to be an appraisal of the Malguk-1 discovery made by BP in 1991.
Malguk-1 discovered 251 feet of light oil pay in turbidite sands but was never tested. Premier estimates an accumulation of more than one billion barrels of oil in place, based on the original well data and its evaluation of the existing 3D dataset.
Charlie-1 will intersect seven stacked prospects, four of which are considered appraisal targets.
The total Gross Mean Prospective Resource across the seven stacked targets to be intersected by Charlie-1 is 1.6 bn barrels of oil (480mln barrels net to 88E).
The team-up deal sees 88 Energy retain a 30% stake in the Area A portion of the Project Icewine acreage. Additional option deals are in place that would give Premier access to Areas B and C.