GCI88 Energy to raise £4.5m to fund flow testing and exploration in Alaska and Texas
() , an Alaska-focused hydrocarbon explorer, announced a placing to raise up to £4.5m at a price of 0.31p, representing a discount of 15% to the volume-weighted average price on ASX for the 15 days to 31 July 2023, and a discount of 7.7% to Monday's closing price.
The placing follows 88 Energy's closed offer from 31 July 2023 to raise up to £6.3m at the same 0.31p price, which successfully raised £1.7m.
88 Energy said its shares have been placed in a trading halt on ASX pending the release of an announcement in relation to the placing, which is being managed by Cenkos in the UK and Euroz Hartleys in Australia.
The energy company said it would use the proceeds to fund ongoing activity across its portfolio of oil and gas exploration assets on the North Slope of Alaska and onshore Texas. This includes flow testing of the Hickory-1 well at Project Phoenix in Alaska.
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88 Energy's portfolio continues to show promise, and today's announcement of a £4.5m fundraise should keep exploration activities on schedule. At Project Phoenix on Alaska's North Slope, 88 Energy has identified multiple hydrocarbon bearing zones across all pre-drill targets, including the new Upper SFS. The Hickory-1 well is currently cased ahead of the upcoming flow test program, which is scheduled to commence in the 2023/24 winter operational season. Rig selection and contract negotiation is expected to be concluded imminently, with key long lead items being ordered.
88 Energy is also developing its portfolio of conventional projects on Alaska's North Slope, including geophysical assessment of the newly acquired Project Leonis acreage. The company is working toward a maiden resource estimate for Leonis by the end of 2023, and planning to launch a targeted farm-out process to help fund future drilling in 2024/25. Additionally, at the recently expanded Project Longhorn in Texas, 88 Energy is planning 2 new wells and workovers to grow production. These activities are expected in H2 2023.
In summary, the fundraise will keep the 88 Energy funded for at least another 12 months, and enable it to progress through several milestones over the next 9 months that will keep investors engaged. Namely, these are the planned flow testing of the Hickory-1 well at Project Phoenix in Alaska, planned development wells in Texas, and planned permitting activities associated with exploration drilling at Project Leonis in Alaska.
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