REG - 88 Energy Limited - Placement to Raise A$17.5M

88 EnergyAnnouncement

06/02/2023 07:00

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RNS Number : 9485O  88 Energy Limited  06 February 2023

 

This announcement contains inside information

 

88 Energy Limited

Placement to Raise A$17.5M

Highlights

·     Oversubscribed Placement to raise A$17.5 million (before costs)
from domestic and international institutional and sophisticated investors.

·     Issue price of A$0.0095 per share (£0.0055).

·     Funds to be directed towards the planned Hickory-1 well at Project
Phoenix, payment for the new Project Leonis acreage, portfolio expansion
opportunities / new ventures and additional working capital.

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$17.5
million (approx. £10.1 million) before costs (the Placement). This is to be
achieved through the issue of 1,842,105,263 fully paid ordinary shares in the
Company (the New Ordinary Shares) at an issue price of A$0.0095 (£0.0055) per
New Ordinary Share (the Issue Price), which represents a 20.8% discount to the
closing price of A$0.012 on 1 February 2023 and a 20.2% discount to the ASX
VWAP for the ten calendar days prior to 1 February 2023.

The net proceeds of the Placement, together with the Company's existing cash
reserves (A$14.1 million (approx. £8.1 million) as at 31 December 2022),
will strengthen the Company's balance sheet and will provide the Company with
sufficient capital to fund the planned Hickory-1 well at Project Phoenix,
payment for the new Project Leonis acreage, finance potential portfolio
expansion / new ventures (should any be identified and pursued), and also
additional working capital. Following completion of the proposed Placing, the
Company will have sufficient cash to fund its ongoing working capital
requirements and general and administrative overheads for at least 12 months.

The Company will now focus its attention on the Hickory-1 well, which is
expected to spud in early March 2023.  Hickory-1 is designed to appraise up
to six conventional reservoir targets within the SMD, SFS, BFF and KUP
reservoirs and 647 million barrels of oil(1,2), and is permitted up to a total
depth of 12,500 feet.  Hickory-1 is expected to cost approximately US$13.5
million gross (88E net approx. US$10 million), with this modest cost a result
of the proximity of Project Phoenix and the Hickory-1 well to key
infrastructure including the Dalton Highway.

 

88 Energy Managing Director, Ashley Gilbert, commented:

"Completion of this placement ensures 88 Energy is fully funded for the
drilling cost of the Hickory-1 exploration well and, upon success, a flow test
to be carried out during the 2023/24 winter operational season in Alaska.
Funds will also be directed toward the initial acreage payment and further
assessment of Project Leonis. We also continue to pursue additional new
ventures, targeting opportunities across the asset life cycle that are
complementary to our existing portfolio and provide shareholders with exposure
to further value creation potential."

 

(1) Cautionary Statement: The estimated quantities of petroleum that may be
potentially recovered by the application of a future development project
relate to undiscovered accumulations. These estimates have both an associated
risk of discovery and a risk of development. Further exploration, appraisal
and evaluation are required to determine the existence of a significant
quantity of potentially movable hydrocarbons.

(2) Mean unrisked resource - Net Entitlement to 88 Energy. Refer announcement
released to ASX on 23 August 2022.

 

Euroz Hartleys Limited acted as Sole Lead Manager and Sole Bookrunner to the
Placement. Cenkos Securities Plc acted as Nominated Adviser and Sole Broker to
the Placement in the United Kingdom. Inyati Capital Pty Ltd (Inyati) 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
Cenkos Securities Plc. In addition, the Company will issue 75,000,000 Unlisted
Options (exercisable at A$0.02 on or before the date which is 3 years from the
date of issue) in total to the managers of the Placement. Grant of these
Unlisted Options does not require shareholder approval as the issuance will
fall within the Company's placement capacity pursuant to ASX Listing Rule 7.1.

 

The issue of the 1,842,105,263 New Ordinary Shares is not subject to
shareholder approval as the issuance will fall within the Company's placement
capacity pursuant to ASX Listing Rule 7.1. The New Ordinary Shares will rank
pari passu with the existing ordinary shares in the Company, with settlement
scheduled for 13 February 2023. Application has been made for the New Ordinary
Shares to be admitted to trading on AIM ("Admission"), with Admission expected
to occur at 8.00 a.m. on 14 February 2023.

 

Following the issue of the New Ordinary Shares, the Company will have
20,107,868,225 ordinary shares on issue, all of which have voting rights. The
figure of 20,107,868,225 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.

 

As referenced in the quote from the Managing Director above, the Company notes
that it is continually assessing new venture opportunities across the asset
life cycle to expand its portfolio of assets and opportunities.  Such
potential opportunities are not announced until such time as the Company has
agreed the material commercial and legal terms with the relevant counterparty
or counterparties, and customary due diligence is completed. Until the
material commercial and legal terms have been agreed and due diligence
completed, there can be no guarantee that such discussions, whether or not
they have been disclosed, will lead to the announcement or completion of a
binding agreement.

 

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 37 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 8 9485 0990

Email:investor-relations@88energy.com

 

Fivemark Partners, Investor and Media
Relations

Michael
Vaughan
Tel: +61 422 602 720

 

EurozHartleys Ltd

Dale
Bryan
Tel: + 61 8 9268 2829

 

Cenkos
Securities

Neil McDonald / Derrick
Lee
Tel: + 44 131 220 6939

 

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