REG - 88 Energy Limited - Successful Placement To Raise A$9.9M

88 EnergyAnnouncement

24/04/2024 07:00

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RNS Number : 7379L  88 Energy Limited  24 April 2024

This announcement contains inside information

24 April 2024

 

88 Energy Limited

SUCCESSFUL PLACEMENT TO RAISE A$9.9M

Highlights

·   Completion of oversubscribed share placement to raise A$9.9 million
(before costs) to domestic and international institutional and sophisticated
investors at an issue price of A$0.003 per share (£0.0016 per share).

·    Placement proceeds will be directed towards costs associated with the
recent successful flow test at the Hickory-1 discovery well located at Project
Phoenix, as well as post-flow test studies, securing of further Contingent
Resource estimates and other costs associated with commercialising Project
Pheonix.

·   Funds from the placement will also be directed towards exploration
activities across the Company's acreage in Namibia and Alaska.

 

88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or the Company) is
pleased to advise that it has successfully completed a bookbuild to domestic
and international institutional and sophisticated investors to raise A$9.9
million (approx. £5.23 million) before costs (the Placement). The Placement
will involve the issue of 3,291,974,839 new fully paid ordinary shares in the
Company (the New Ordinary Shares) at an issue price of A$0.003 (£0.0016) per
New Ordinary Share) (the Issue Price).

Based on the forecast activity schedule the Company is now funded for at least
the next 12 months, with net proceeds of the Placement, together with the
Company's existing cash reserves (A$17.5 million as at 31 March 2024,
unaudited), directed towards:

 

Ø Project Phoenix, Alaska: Following the successful flow testing at the
Hickory-1 discovery well, 88 Energy will be focused on:

§ Completing post-well testing and analysis at Hickory-1;

§ Securing a contingent resource for the SFS and SMD reservoirs;

§ Commencing a formal farm-out process to attract a high-quality new partner
to fund the next stage of appraisal and development; and

§ Advance planning and design of an early stage production system.

Ø PEL 93, Namibia: Completion of 2D Seismic program, generation of a maiden
prospective resource report and other studies associated with the Owambo
Basin.

Ø Project Leonis, Alaska: Securing a farm-out partner to fund a future
exploration well to test the proven producing Upper Schrader Bluff (USB)
reservoir and continue further studies and analysis.

 

Funds will also be applied towards Alaskan lease rental costs, working capital
and assessment of further new venture opportunities.

88 Energy Managing Director and CEO, Ashley Gilbert, commented:

"We are now funded to proceed with the development and monetisation plans for
Project Phoenix.  The next steps include post-well flow test studies,
securing additional contingent resources at SMD and SFS to complement the BFF
contingent resource, and exploring a farm-out of Project Phoenix to engage a
strategic partner for the next phase of development and commercialisation. The
successful Hickory-1 flow test creates multiple paths for 88 Energy and its
Joint Venture partner to commercialise and realise value from Project Phoenix.

At the same time, we are also enthusiastic about our initial exploration
activities on the Namibian farm-in acreage at PEL 93. The Owambo Basin offers
substantial hydrocarbon exploration potential across a highly prospective and
underexplored region."

 

Q1 CY24 Activity Recap - A Period of Exploration Success

ü Successful Hickory-1 discovery well flow test and stimulation program (Flow
Test) completed during March and April 2024.

ü Upper Slope Fan System (USFS) produced at a peak flow rate of over 70
barrels of oil per day (bopd) of light oil, with multiple oil shows measuring
~40-degree API oil gravity.

ü Shelf Margin Deltaic (SMD) produced at a peak flow rate of ~50 barrels of
oil per day (bopd) of light oil, with multiple oil shows measuring ~39-degree
API oil gravity.

ü Quality and deliverability of both SMD-B and USFS demonstrated via oil
production to surface with the USFS reservoir producing under natural flow,
unlike the SMD reservoir tests that produced under nitrogen lift.

 

Placement details

The issue of the 3,291,974,839 New Ordinary Shares fall within the Company's
placement capacity pursuant to ASX Listing Rules 7.1 and is not subject to
shareholder approval.

 

The New Ordinary Shares will rank pari passu with the existing ordinary shares
in the Company, with settlement on ASX scheduled for 30 April 2024.
Application has been made for the New Ordinary Shares to be admitted to
trading on AIM (Admission), with Admission expected to occur at 8.00am (UK
time) on 1 May 2024.

 

The Issue Price represents a 40% discount to the closing price of A$0.005 on
22 April 2024 and a 33.7% discount to the ASX VWAP for the five trading days
prior to 23 April 2024.

 

Euroz Hartleys Limited acted as Sole Lead Manager and Bookrunner to the
Placement. Cavendish Capital Markets Ltd acted as Nominated Adviser and Sole
Broker to the Placement in the United Kingdom. Inyati Capital Pty Ltd acted as
Co-Manager to the Placement. Commission for the Placement was 6% (plus GST) of
total funds raised across Euroz Hartleys Limited, Inyati Capital Pty Ltd and
Cavendish Capital Market Ltd. In addition, subject to shareholder approval,
the Company will issue 75,000,000 Unlisted Options (exercisable at A$0.0055 on
or before the date which is 3 years from the date of issue) in total to the
managers of the Placement.

 

Namibia PEL 93 Farm-in - Final Tranche 1 Payment

Monitor Exploration Limited (MEL) has agreed to receive 88 Energy shares as
settlement for the fourth and final Stage 1 instalment of the farm-in
agreement, as announced to the ASX on 13th November 2023.  This instalment
covers the remaining back costs and the 2024 work program carry of US$0.92
million. The issuance and payment of 476,634,546 new ordinary 88 Energy Shares
(at a deemed issue price of A$0.003 per share) set to take place on 1 May 2024
following the transfer of the 20% working interest in PEL 93 from MEL to 88
Energy.

 

Capital Structure

The New Ordinary Shares will be issued under the Company's available placement
capacity pursuant to Listing Rule 7.1 and is not subject to shareholder
approval. The Ordinary Shares will rank pari passu with the existing ordinary
shares in the Company with settlement to the ASX on 30 April 2024. Application
has been made for the New Ordinary Shares to be admitted to trading on AIM,
with Admission expected to occur on or around 1 May 2024.

 

Following the issue of the New Ordinary Shares pursuant to the Placement and
the final stage 1 shares issued to MEL, the Company will have 28,892,671,952
ordinary shares on issue, all of which have voting rights. The figure of
28,892,671,952 ordinary shares may be used by shareholders as the denominator
for the calculations by which they will determine if they are required to
notify their interest in, or change their interest in, the Company.

 

Pursuant to the requirements of the ASX Listing Rules Chapter 5 and the AIM
Rules for Companies, the technical information and resource reporting
contained in this announcement was prepared by, or under the supervision of,
Dr Stephen Staley, who is a Non-Executive Director of the Company. Dr Staley
has more than 40 years' experience in the petroleum industry, is a Fellow of
the Geological Society of London, and a qualified Geologist/Geophysicist who
has sufficient experience that is relevant to the style and nature of the oil
prospects under consideration and to the activities discussed in this
document.

 

Dr Staley has reviewed the information and supporting documentation referred
to in this announcement and considers the resource and reserve estimates to be
fairly represented and consents to its release in the form and context in
which it appears. His academic qualifications and industry memberships appear
on the Company's website and both comply with the criteria for "Competence"
under clause 3.1 of the Valmin Code 2015. Terminology and standards adopted by
the Society of Petroleum Engineers "Petroleum Resources Management System"
have been applied in producing this document.

 

 

 

This announcement has been authorised by the Board.

 

Media and Investor Relations:

 

 88 Energy Ltd

 Ashley Gilbert, Managing Director

 Tel: +61 (0)8 9485 0990

 Email:investor-relations@88energy.com

 Fivemark Partners, Investor and Media Relations
 Michael Vaughan                                  Tel: +61 (0)422 602 720

 EurozHartleys Ltd
 Dale Bryan                                       Tel: +61 (0)8 9268 2829

 Cavendish Capital Markets Limited                Tel: +44 (0)207 220 0500
 Derrick Lee                                      Tel: +44 (0)131 220 6939
 Pearl Kellie                                     Tel: +44 (0)131 220 9775

 

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