24th Aug 2015 08:29
LONDON (Alliance News) - 88 Energy Ltd on Monday said it has signed a funding agreement with Bank of America for a USD50 million credit facility, meaning it is full funded ahead of the spudding of its Icewine exploration well onshore in Alaska.
The deal follows completion of a detailed due diligence process by Bank of America on 88 Energy's Icewine project, the company said. 88 Energy has agreed to spend about USD5.7 million of its own money, including its equity contribution towards the authority for expenditure for the well, interest on the equity contribution, and structuring fees.
88 Energy Managing Director Dave Wall said the company is now fully funded for drilling, a result of the funding deal and a AUD12 million equity raising in July. The Icewine #1 exploration well, onshore in Alaska, is to spud in October, the company said.
"Costs associated with the drilling of Icewine #1 are eligible for up to 85% in cash rebates under the Alaskan Government credit scheme," Dave Wall said in a statement.
"A regional drilling program consisting of four to five wells will commence in a few short weeks, starting with Icewine #1 in October, targeting the HRZ unconventional oil play. Drilling will continue with three to four wells from early 2016, targeting conventional oil plays on acreage immediately adjacent to Project Icewine. The scale of this USD100 million [plus] drilling program speaks to the significant potential of the region, and provides multiple opportunities for a considerable re-rating of the value of 88 Energy's acreage," Wall said.
88 Energy shares were up 5.3% at 0.500 pence on Monday morning in London.
By Samuel Agini; [email protected]; @samuelagini
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