88 Energy Ltd (LON:88E) has struck a deal to sell its accumulated tax credits for US$18.7mln (£13.5mln) and it will use the proceeds to clear debt.
The Alaska-focussed explorer said it will pay off its outstanding debt, US$16.1mln, and will retain the remaining US$2.6mln of proceeds to boost its cash holdings.
It noted that the deal is with a large oil and gas company in the United States with multiple exploration and production assets.
"This is a transaction which accelerates the realisation of value of the Alaskan Oil and Gas Tax Credits and the early repayment of outstanding debt due to be repaid by the end of 2022,” said Ashley Gilbert, managing director.
“As a result of the transaction, the company is now set to be debt-free with reduced annual overheads of over US$1 million in associated finance costs.”