(Alliance News) - 88 Energy Ltd on Monday announced plans to raise up to AUD12.0 million, about GBP6.3 million, from a rights issue of shares, which it will use to progress projects in the US states of Alaska and Texas.
The shares will be offered to existing shareholders on the basis of 1 new share for every 10 already held. The shares will be priced at AUD0.006 per share, or GBP0.0031.
88 Energy shares were down 7.2% to 0.35 pence in London on Monday morning. They closed in Sydney at AUD0.007, unchanged.
If all entitlements are take up, 88 Energy will issue 2.0 billion new shares, taking its new total to 22.12 billion, so the new shares will make up just under 10% of the expanded share capital.
88 said the net cash received will be used for flow testing of the Hickory-1 well at Project Phoenix in the North Slope of Alaska and on development wells and work-overs at Project Longhorn in Texas, as well as other testing and permitting activities.
Hickory-1 was spudded back in March. It was cased and suspended ahead of flow testing.
At Longhorn, 88 Energy earlier this month bought a 45% non-operated net working interest in acreage four miles south of the project. Production at Longhorn averaged 370 barrels of oil equivalent per day gross in the recent quarter, with 88 Energy receiving AUD1.1 million in cash flow distribution in June.
Separately on Monday, 88 Energy said an updated independent prospective resources assessment at Project Peregrine, also in the North Slope of Alaska, has confirmed "significant potential" with the project's remaining acreage. Two new reservoir targets have been identified in the Harrier Prospect of the project.
By Tom Waite, Alliance News editor
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88 Energy (88E)