88 Energy Ltd (AIM:88E, ASX:88E, OTC:EEENF) said it will turn to the market to raise at least A$10mln in a share placing as it announced the completion of a maiden independent resource estimate for its Icewine project, Alaska, and unveiled interim results.
On top of the placing, the AIM-quoted explorer said there will be the ability to accept over-subscriptions of up to A$4.99mln.
The company said it will issue a maximum of 1.6bn shares at a placing price of A$0.009, an 18.2% discount from its closing price on 9 August, with shares suspended on the Australian Stock Exchange until completion.
According to a statement, the cash raised will be used to “strengthen the company's balance sheet and will provide the company with sufficient capital to finance potential new ventures, purchase long lead items required for drilling of the well at Icewine in 2023, and also additional working capital”.
In a separate update on the Icewine project, it told investors that a maiden independent resource estimate showed a prospective estimate of 1.03bn barrels (bnbbls) of oil recoverable from multiple reservoirs at Icewine, on Alaska's North Slope.
The group is looking to drill an exploration well next year after there were “substantial” oil volumes noted across all mapped play fairways.
"This maiden, independently certified 1.03 Bnbbls of oil resource estimate is a great result for 88E and its shareholders,” said managing director Ashley Gilbert.
“Resources of this magnitude present our shareholders with significant upside potential and opportunity, which is why we continue to focus on our Alaskan portfolio and believe significant value exists in our Icewine East acreage.”
He said full interpretation of the recently licensed Franklin Bluffs 3D data is ongoing to define 'sweet spots' for each play and determine optimal future exploration and appraisal drilling locations.
Separately, in its interim results, the group reported a loss of A$67.2mln in the first six months of 2022, down from a profit of A$445,446 the year prior.
According to a statement, this was largely due to the impairment of the Merlin 1 and 2 wells, which “experienced cost pressures including COVID-19, supply chain issues, labour constraints and global commodity price increases that placed pressured on original budgeted costs.”
As of 30 June, 88 Energy’s cash balance stood at A$10.5mln.