RNS just released in UKToday 07:01RNS Number : 6388K88 Energy...

RNS just released in UK

Today 07:01

RNS Number : 6388K

88 Energy Limited

29 August 2023

88 Energy Limited

Proposed placing to raise up to £4.5 million

88 Energy Limited ("88 Energy" or the "Company") (ASX, AIM: 88E) today announces that it proposes to raise up to £4.5 million (before expenses) pursuant to a conditional placing of up to 1,457,716,474 new ordinary shares of no par value in the Company (or, as the case may be, depository interests representing such ordinary shares) (the "Placing Shares") at a price of £0.0031 per Placing Share (the "Placing Price"), (together, the "Placing"), which is the price at which shares were issued pursuant to the Rights Issue (as defined below).

The Placing follows the closure of the non-renounceable rights issue (for AIM purposes, the 'open offer') of up to 2,010,786,822 ordinary shares at a price of £0.0031 (or A$0.006) per share announced on 31 July 2023 to raise up to approximately £6.3 million (the "Rights Issue"), pursuant to which the Company received total applications for 553,070,348 ordinary shares, raising gross proceeds of £1.7 million (equivalent to approximately A$3.3 million). The Placing will be carried out within the Company's existing placement capacity and does not require shareholder approval.

The Placing Price represents a discount of 15 per cent. to the volume weighted average price on the Australian Securities Exchange ("ASX") for the fifteen days to 31 July 2023, being the latest practicable date prior to the announcement of the Rights Issue, and a discount of 7.7 per cent. to the ASX closing price on 28 August 2023, being the latest practicable date prior to this announcement. The Company also announces that its shares have been placed in a trading halt on the ASX pending the release of an announcement in relation to the completion of the Placing.

The Placing is being conducted through a bookbuilding process (the "Bookbuild"), which is being managed by Cenkos Securities plc ("Cenkos") in the UK and Euroz Hartleys Limited ("Hartleys") as Lead Manager in Australia.

Current and Planned Activities

The funds raised through the Rights Issue and the Placing will be used to fund ongoing activity across its portfolio of oil and gas exploration assets, located on the North Slope of Alaska and onshore Texas.

The Company's planned activities include the flow testing of the Hickory-1 well, located in Project Phoenix. Multiple hydrocarbon bearing zones were identified across all pre-drill targets, including the new Upper SFS. The Hickory-1 well is currently cased and suspended ahead of the upcoming flow test program which is scheduled to commence as early as possible in the 2023/24 winter operational season. The flow test and well stimulation program is being developed in consultation with flow test design experts who are utilising available regional information in combination with a detailed evaluation of the drilling and wireline logging data from Hickory-1.

Program planning is on schedule and will include rigorous technical and economic optimisation prior to finalisation. Rig selection and contract negotiation is expected to be concluded imminently and key long lead items required are being ordered.

The Company is also progressing activities across its portfolio of conventional projects located on the North Slope of Alaska, which includes a petrophysical and geophysical assessment of the Company's Project Leonis acreage, which was awarded in April 2023. The Company is working towards announcing a maiden prospective resource estimate by the end of 2023 and plans to launch a targeted farm-out process to help fund future drilling activity at Project Leonis in 2024 / 2025.

Additionally, the Company will continue to progress development activities at Project Longhorn, where it is planning to drill two new wells and perform two workovers to grow production from this acreage. It is expected that these activities will take place in the second half of 2023.

Rationale for the Placing and Use of Proceeds

The proceeds of the Placing are designed to allow existing shareholders exposure to potentially transformational activity over the next 9 months, with the net proceeds intended to be used for:

· Planned flow testing of the Hickory-1 well at Project Phoenix, North Slope Alaska

· Planned development wells at Project Longhorn, Texas

· Planning and permitting activities associated with the potential drilling of a exploration well at Project Leonis on the North Slope Alaska in 2024 / 2025

· Working capital for the next 12 months

Details of the Placing

The Bookbuild will open with immediate effect following release of this announcement. The number of Placing Shares to be issued in the Placing will be agreed by Cenkos, Euroz Hartleys and the Company at the close of the Bookbuild. The timing of the closing of the Bookbuild and allocations are at the discretion of Cenkos, Euroz Hartleys and the Company. Details of the number of Placing Shares to be issued will be announced as soon as practicable after the close of the Bookbuild.

The Placing is subject to the terms and conditions set out in the Appendix (which forms part of this announcement, such announcement and the Appendix together, the "Announcement").

Application will be made to the London Stock Exchange for the Placing Shares to be issued pursuant to the Placing to be admitted to trading on AIM. It is expected that admission to trading on AIM ("Admission") will become effective and that dealings in the Placing Shares will commence on AIM at 8.00 a.m. on 8 September 2023.

The Placing Shares will be issued and credited as fully paid and will rank in full for all dividends and other distributions declared, made or paid after the admission of those Ordinary Shares and will otherwise rank on Admission pari passu in all respects with each other and with the existing ordinary shares in the Company.

The Placing is conditional upon, inter alia, Admission taking place by no later than 8.00 a.m. on 8 September 2023 (or such later date as Cenkos may agree in writing with the Company, being not later than 8.00 a.m. on 22 September 2023) and the Placing Agreement entered into between the Company and Cenkos not being terminated prior to Admission. If any of the conditions of the Placing Agreement are not satisfied, the Placing Shares will not be issued and Admission will not take place.

The Placing will be carried out within the Company's existing placement capacity pursuant to ASX Listing Rule 7.1 and 7.1A, such that shareholder approval will not be required for the Placing.

The Placing Shares have not been made available to the public and have not been offered or sold in any jurisdiction where it would be unlawful to do so.

This Announcement should be read in its entirety. In particular, your attention is drawn to the "Important Notices" section of this Announcement, to the detailed terms and conditions of the Placing and further information relating to the Bookbuild described in the Appendix to this Announcement (which forms part of this Announcement).

By choosing to participate in the Placing and by making an oral and legally binding offer to acquire Placing Shares, investors will be deemed to have read and understood this Announcement in its entirety (including the Appendix), and to be making such offer on the terms and subject to the conditions of the Placing contained herein, and to be providing the representations, warranties and acknowledgements contained in the Appendix.

In this Announcement, references to "pounds sterling", "£", "pence" and "p" are to the lawful currency of the United Kingdom and references to "Australian dollars", "A$" and "A cents" are to the lawful currency of Australia. Unless otherwise stated, the basis of translation of Australian dollars into pounds sterling is A$1 = £0.52.