88E raising $12M through a rights issue
Our US based oil and gas Investment 88 Energy (ASX: 88E) just launched a rights issue.
88E is looking to raise $12M at 0.6c per share.
The rights issue is on a 1:10 basis meaning 88E shareholders who hold 10 shares will be able to subscribe for ONE new 88E share at the 0.6c offer price.
88E is ultimately looking to add to its existing $7.3M cash balance (at 30 June 2023) so that it can fund its Hickory-1 flow testing program later this year/early next.
The key dates for the offer are as follows:
88E plans to use the funds to:
- Flow testing of the Hickory-1 well at -
This is the big one for us, we have written in detail about what 88E has managed to find here so far… read our last note on 88E here: 88E delivers 450 feet (~137m) of net pay - now we wait for the flow test…
Now all the company needs to do is flow test the well and show the market it can produce oil and gas at economically viable rates.
IF 88E can deliver strong flow rates we think it will be the catalyst for a re-rate higher in the company’s share price.
We noticed 88E expects to spend ~$6.5M on the flow test:
2). Drill development wells at its production assets in Texas, USA - see our latest Quick Take on 88E’s production assets here.
3). Pre-drilling work across its other projects in Alaska including Project Leonis - which sits immediately to the south of Prudhoe Bay (one of the US’s biggest ever oil discoveries). We looked at the potential at Leonis in a previous Quick Take here.
Small shareholding facility:
Together with the rights issue announced today, 88E is also offering a “Small Holding Share Sale Facility”.
This is basically when a company offers shareholders with <$500 in shares a chance to sell those shares without any brokerage costs.
88E had ~8,847 shareholders holding ~1.32% of the company’s shares in this position.
The due date for this is the 11th of September.
What’s next for 88E:
Flow testing program for the Hickory-1 well in Alaska, USA 🔄 -
Below is the timeline 88E has set for the flow testing of Hickory-1.
