Shares of 88 Energy Ltd (LON: 88E) crashed 19.5% after the Alaskan mining company announced plans to raise 12 million Australian dollars to fund new wells on its North Slope projects in Alaska.
The company, which is dual-listed in Australia and the UK, intends to raise funds via a share placement valuing each of the new shares at 0.45p, a 27% discount to yesterday’s closing price, which triggered today’s decline.
88 Energy plans to use the new funds to identify and exploit new opportunities within the North Slope region even as it prepares to drill the Merlin-1 exploration well after confirming plans to spud the well in late-February to early March.
The miner clarified that it would use the funds to bolster its working capital, which stood at A$14.8 million at the end of December, which would allow it to cater for any cost overruns at its Merlin-1 well and the costs for the planned Harrier-1 well.
Both wells are being drilled in partnership with other companies to minimise 88 Energy’s costs. The firm got access to the two wells after merging with XCD Energy in 2020 gaining access to the Peregrine acreage.
88 Energy also intends to fund its Umiat oil field, which hosts several wells and is located south of Project Peregrine. The miner will carry out a full field review to determine the potential oil price at which the project can be commercially viable.
The firm also announced that David Wall, its managing director, had tendered his resignation and is set to leave the company in May. Ashley Gilbert, the current CFO, will take over the CEO role in an acting capacity until David goes after which he will be in charge of the company.
88 Energy share price.
88 Energy shares crashed 19.46% to trade at 0.451p having dropped from Tuesday’s closing price of 0.56p.
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