88 Energy has completed a shortfall offer placement for all of the shares not taken up in its recent rights issue.
The proceeds of the rights issue and shortfall offer together amount to A$8.0 million (£4.1 million) before costs, which add to existing cash reserves (A$7.3 million (approx. £3.8 million) as of 30 June 2023.
The additional funds will strengthen the company's balance sheet and provide further capital to fund its share of the Hickory-1 well flow test at Project Phoenix, 88 said, plus permitting and planning for a potential new well at Project Leonis.
Elsewhere, the company has agreed to part-fund its share of the first two new wells at the recently acquired Bighorn Phase 2 acreage in Texas, anticipated to cost US$3 million (net) in development capital, through the issuance of A$4.0 million worth of 88 Energy shares as part of the shortfall offer placement.
88 explained; “The issue of A$4 million worth of capital development shares is expected to save the company at least an equivalent amount in cash costs on development wells for Project Longhorn production growth, so that the value of the benefit to the company from the rights issue and shortfall placement totals A$12 million / approx. £6.4 million (before costs).”