TIDM88E
RNS Number : 7624C
88 Energy Limited
03 October 2018
3(rd) October 2018
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS
RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION, OR DISTRIBUTION IN
OR INTO CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA AND THE UNITED
STATES OR ANY OTHER JURISDICTION WHERE THE EXTENSION OR
AVAILABILITY OF THE OPEN OFFER WOULD BREACH ANY APPLICABLE LAW OR
REGULATIONS
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN
ARTICLE 7 OF THE MARKET ABUSE REGULATION NO. 596/2014 ("MAR"). UPON
THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS
NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
88 Energy Limited
Non-Renounceable Rights Issue / Open Offer
88 Energy Limited (ASX: 88E) ("88 Energy" or the "Company") is
pleased to announce the Company's intention to launch a
non-renounceable rights issue (open offer for AIM purposes) to
raise up to approximately A$14.33m / GBP7.96m (the "Offer").
Highlights
-- Proposed Offer to be made on the basis of one (1) new share
for every seven (7) shares held by qualifying shareholders as at
10(th) October 2018 (the "Record Date")
-- New shares to be issued pursuant to the Offer at A$0.018 / GBP0.01 per share
-- Offer to be made available to qualifying shareholders in
Australia, United Kingdom and New Zealand
-- Designed to allow existing shareholders exposure to
potentially transformational activity over the next 9 months
-- Net proceeds of the Offer intended to be used for:
o Potential production testing at Winx-1 exploration well
o Possible cost overruns associated with the drilling of
Winx-1
o Lease rentals and interest costs to maintain assets in good
standing
o Ongoing geological and geophysical work
o Working capital and general administration
Overview
The Company is pleased to announce that it intends to launch the
Offer which will provide the opportunity for existing qualifying
shareholders to participate in a fundraising of up to approximately
A$14.33m / GBP7.96m, the net proceeds of which will be used to fund
ongoing activity across its portfolio of oil and gas exploration
assets, located on the North Slope of Alaska.
This activity includes the drilling of the high impact Winx-1
exploration well, scheduled for spud in February 2019, which is
targeting gross mean prospective resources of 400 million barrels
of oil (144 million barrels net to 88E). The Winx-1 well is located
at the Company's Western Blocks project, where 88 Energy is earning
a 36% working interest by funding 40% of the cost of the drilling
of the well.
The Company is also progressing a farm-out of its conventional
prospect portfolio at Project Icewine, where 1.75 billion barrels
of net mean prospective resource has been delineated with 2D and 3D
seismic. The process is targeted for completion by calendar year
end 2018.
Additionally, the Company continues to progress evaluation of
the HRZ shale play ahead of a planned farm-out in 1H2019 as well as
finalising the resource potential on its Yukon Leases, where 3D
seismic was recently acquired.
Details of the Offer
The full details of the Offer will be set out in an Offer
Document, which is expected to be posted to all shareholders and
lodged with the ASX on or around 5(th) October 2018, as per the
timetable set out below.
Qualifying shareholders will be offered the opportunity to
acquire fully paid ordinary shares in the capital of the Company
via the Offer. The Offer will be made on the basis of one (1) new
share for every seven (7) shares held by qualifying shareholders as
at the Record Date at an issue price of A$0.018 / GBP0.01 per share
("Offer Price") to raise up to A$14.33m / GBP7.96m. As at market
close on Monday 1(st) October 2018, being the latest practicable
date prior to this announcement, the Offer Price represents a 15%
discount to the 15-day VWAP of A$0.0212.
Qualifying shareholders will be those shareholders (or
depositary interest holders) on the register at the Record Date
(excluding holders who have a registered address or who are
resident outside of Australia, New Zealand or the United Kingdom or
any other jurisdiction (apart from certain restricted
jurisdictions) in which the Directors in their absolute discretion
determine to make the Offer available).
Qualifying shareholders will also be given the opportunity to
apply for additional shortfall shares beyond their 1 for 7
entitlement. It is the intention of the Board to allocate
additional shortfall shares on a pro-rata basis calculated using
the number of shares held as at the close of the offer period.
The Company reserves the right to place any shortfall shares
that are not taken up by existing shareholders at the discretion of
the Directors.
The Directors of the Company have indicated their intention to
take up their full entitlement under the Offer.
Assuming all entitlements are taken up under the Offer, the
Company will issue approximately 795 million new shares, resulting
in a total of approximately 6,366 million shares on issue.
Indicative Timetable
The proposed timetable for the Offer is set out below. The dates
are indicative only and the Company reserves the right to vary the
dates, including the right to extend the closing date.
Announcement of the Open Offer 3 October 2018
Appendix 3B, circular (Offer Document) Before 8am on 5 October 2018
and notice under section 708AA(2)(f)
of the Corporations Act 2001 (Cth)
lodged with the ASX
Notice to Securityholders 8 October 2018
Expected ex-entitlement date for the 8.00 a.m. (London Time) on 9
Open Offer October 2018
Record Date for the Open Offer 7.00 p.m. (AEDT) in respect of
Qualifying Ordinary Shareholders
and 6.00 p.m. (London time) in
respect of Qualifying Depositary
Interest Holders on 10 October
2018
Trading commences Ex-entitlement on 10 October 2018
ASX
Publication and despatch of this document 12 October 2018
and Application Forms
Open Offer Entitlements and CREST Excess as soon as practicable after
Entitlements credited to CREST stock 8.00 a.m. (London time) on 12
accounts of Qualifying Depositary Interest October 2018
Holders
Recommended latest time for requesting 4.30 p.m. (London time) on 19
withdrawal of Open Offer Entitlements October 2018
and CREST Excess Entitlements from
CREST
Latest time for depositing Open Offer 3.00 p.m. (London time) on 22
Entitlements and CREST Excess Entitlements October 2018
into CREST
Last date to extend 22 October 2018
Latest time for splitting 11.00 a.m. (London time) on 24
October
Closing date - Latest time and date
for receipt of completed Application 11.00 a.m. (London time) on 26
Forms and payment in full under the October 2018
Open Offer or settlement of relevant 5pm (WST) on 26 October 2018
CREST instructions in respect of Depositary
Interests (as appropriate)
Securities quoted on a deferred settlement 29 October 2018
basis
Expected date of announcement of the afternoon of 29 October 2018
results of the Open Offer
Issue date of the Open Offer Shares Before 9am (WST) on 31 October
and CHESS member accounts credited 2018
with Open Offer Shares (as applicable)
Admission and dealings in the Open 8.00 a.m. (London time) on 31
Offer Shares to AIM October 2018 1p.m. (WST) on 31
October 2018
CREST member accounts expected to be as soon as practicable on 31
credited with the Open Offer Shares October 2018
in Depositary Interest form
Quotation of Open Offer Shares on ASX 1 November 2018
David Wall, Managing Director of 88 Energy, commented on the
Rights Issue / Open Offer:
"The Company has successfully completed several placements over
the last four years, which have served to grow the asset base and
diversify our portfolio, which is now stronger than it has ever
been.
There are now four significant projects at mature stages that we
believe can add substantial near to medium term value for our
shareholders via drilling and/or farm-out transactions.
We have received feedback from a number of existing shareholders
asking to be considered in future placements. The Board has
listened and, consequently, we are pleased to provide the
opportunity for all shareholders to participate in funding the
upcoming potentially transformation period for the Company."
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, Mr Brent Villemarette, who is a
Non-Executive Director of the Company. Mr Villemarette has more
than 30 years' experience in the petroleum industry, is a member of
the Society of Petroleum Engineers, and a qualified Reservoir
Engineer 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. Mr Villemarette has
reviewed the information and supporting documentation referred to
in this announcement and considers the prospective resource
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.
Media and Investor Relations:
88 Energy Ltd
Dave Wall, Managing Director Tel: +61 8 9485 0990
Email: admin@88energy.com
Finlay Thomson, Investor Relations Tel: +44 7976 248471
Hartleys Ltd
Dale Bryan Tel: + 61 8 9268 2829
Cenkos Securities Tel: + 44 131 220 6939
Neil McDonald/Derrick Lee
88 Energy Alaska North Slope Assets Overview
Project Icewine
In November 2014, the Company entered into a binding agreement
with Burgundy Xploration (BEX) to acquire a significant working
interest in a large acreage position on a multiple objective,
liquids rich exploration opportunity onshore Alaska, North America,
referred to as Project Icewine. The current gross acreage position
is 525,000 contiguous acres (349,000 acres net to the Company).
These are marked in blue and red on the below map.
The Project is located on an all year operational access road
with both conventional and unconventional oil potential. The
primary term for the State leases is 10 years with no mandatory
relinquishment and a low 16.5% royalty.
Significant conventional prospectivity has been identified on
recently acquired 2D and 3D seismic across the project acreage
where 1.75 billion barrels of oil potential has been delineated
(net mean prospective resource). A farm-out process is currently
underway, with a deal targeted prior to 2018 year end.
The HRZ liquids-rich resource play was successfully evaluated
based on core obtained in the Icewine#1 exploration well (December
2015), marking the completion of Phase I of Project Icewine. Phase
II comprised drilling in mid 2017 at the follow-up appraisal well,
Icewine#2, which was subsequently fracture stimulated and flow
tested. Production testing at Icewine#2 concluded on 30 June 2018
after retrieving 24.8% of the injected stimulation fluid vs a
targeted return of at least 30%. Gas rates of up 100mcf/d were
achieved during flowback; however, these are not considered
representative due to limited reservoir connectivity. Further
evaluation is being completed prior to launching a formal farm-out
process in early 2019 to fund the future work program.
A map of the 88 Energy North Slope Acreage can be viewed at the
link below:
http://www.rns-pdf.londonstockexchange.com/rns/7624C_1-2018-10-2.pdf
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.
A Prospective Resources Report by DeGolyer and MacNaughton, was
commissioned by 88 Energy to evaluate the unconventional resource
potential of Project Icewine in February 2016 and was released to
the market on 6(th) April 2016.
Yukon Gold
The Yukon Gold leases are located on the eastern border of the
Central North Slope of Alaska and were acquired in 2018. 88 Energy
via its subsidiary has a 100% working interest in these leases,
totalling 14,194 acres. The leases contain an historic discovery
well, Yukon Gold #1, which is currently being evaluated internally.
3D seismic was acquired in early 2018 to assist with this process
and results are expected in 4Q2018. The leases are marked in yellow
on the above map.
Western Blocks
88 Energy is earning a 36% working interest in four leases
(totalling 22,711 acres) immediately adjacent to the Horseshoe#1/1A
oil discovery well. 88 Energy, with its consortium partners Otto
Energy Ltd and Red Emperor Resources NL, has posted a US$3m
performance bond to the State of Alaska and will fund 100% of the
costs of well, targeting a prospect with a gross mean unrisked
prospective resource volume of 400MMbbls (144MMbbls net to 88E), to
be drilled in 1Q 2019. The leases are marked in green on the above
map.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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