88 Energy Limited announces major fundraising initiative to expand operations
88 Energy Limited, a prominent player in the energy sector, has announced its intention to raise up to A$9.8 million (approximately £5.23 million) through a placing of new ordinary shares. This strategic financial move is aimed at supporting the company’s ambitious expansion plans, including the advancement of its Project Phoenix and operations in Namibia.
Strategic Expansion and Financial Enhancement
The proposed placing, set at a placing price of A$0.003 per share, represents a 40% discount to the closing price on the Australian Securities Exchange as of April 22, 2024. This discount aims to attract investors and secure the necessary funding for several high-potential projects. The company is leveraging its existing placement capacity under ASX Listing Rules 7.1, which allows the issuance of up to 3,291,974,839 new ordinary shares without requiring shareholder approval.
Cavendish Capital Markets Limited in the UK, along with EurozHartleys Ltd and Inyati Capital Pty Ltd in Australia, are managing the bookbuilding process. The process commenced immediately following the announcement, reflecting the urgency and importance of this capital raise.
Current Trading and Project Highlights
88 Energy has demonstrated significant operational progress, underscored by its recent exploration successes. Key projects such as Project Phoenix in Alaska and the newly involved PEL 93 in Namibia are central to the company’s growth strategy. Project Phoenix, particularly, has shown promising results with the Hickory-1 discovery well successfully completing flow tests that indicate viable oil production potential.
In Namibia, 88 Energy is expanding its footprint with a 45% working interest in Petroleum Exploration Licence (PEL 93), covering a vast and underexplored area of the Owambo Basin. This project represents a strategic move into one of the world’s most promising new exploration zones.
Future Outlook and Use of Proceeds
The net proceeds from the placing are earmarked for several critical projects. These include the completion of post-well testing at Hickory-1 in Alaska, securing a contingent resource for key reservoirs, and advancing the 2D seismic program in Namibia. Additionally, funds will support ongoing lease rental costs in Alaska and provide working capital for new venture assessments.
The company’s strategic initiatives are set to bolster its position in the global energy market, with a particular focus on enhancing its resource base and advancing towards production.