88 Energy Limited ("88 Energy" or the "Company", ASX:88E, AIM 88E) provides the following update related to its operations in the NPR-A region of the North Slope of Alaska.
· Merlin-1 production hole drilling to commence imminently
· At market share subscription agreement executed
88 Energy is pleased to report that the Merlin-1 surface hole was successfully drilled to 1,512ft as planned. Surface casing has now been cemented and the blow out preventer system tested. A formation integrity test (FIT) was successfully undertaken and the rig is now drilling ahead in the production hole where the primary Nanushuk targets are located. Planned total depth is 6,000'.
Logging while drilling and mudlogging will provide initial indications as to the prospectivity of the well during this part of the operation, which is expected take three to five days. A sophisticated wireline logging suite will then be run, including sidewall cores and downhole sampling. Wireline logging is expected to take five to seven days.
If the results from the wireline logging are encouraging, then the well will be completed with casing and a flow test conducted.
88 Energy has entered into a share subscription agreement (the "Subscription") with ELKO International LLC ("ELKO"), one of the major contractors for the current drilling operations. Under the agreement ELKO has subscribed 360,000,000 new Ordinary Shares at $0.018 (the "Subscription Shares"), raising gross proceeds of $6.48 million at a 225% premium to the placement undertaken on 12th February 2021. There are no fees associated with the Subscription.
Application has been made for the Subscription Shares, which will rank pari passu with the existing ordinary shares in the Company, to be admitted to trading on both the ASX and AIM ("Admission"), with Admission expected to occur on 25 March 2021.
The Subscription does not require shareholder approval and the issue and allotment of the Subscription Shares will rely on the Company's placement capacity pursuant to ASX Listing Rule 7.1A.
Following the issue of the Subscription Shares, the Company will have 12,521,590,431 ordinary shares in issue, all of which have voting rights. The figure of 12,521,590,431 ordinary shares may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or change their interest in, the Company.
Managing Director, Dave Wall, commented: "The endorsement of the project by ELKO as we enter the critical phase of the drilling is encouraging and will serve to fund the Company's share of the recently announced cost overruns.
We wish all our shareholders good fortune over the coming days."