88 Energy highlights quarterly progress in Alaska
(AIM:88E ) updated investors on its progress this morning for the quarter ended 30 September 2020, while the group continues to advance two new farm-outs in Alaska.
The Alaskan explorer completed its acquisition of XCD Energy, which holds a 100% Working Interest in the highly prospective Alaskan North Slope, back in August 2020. The merged entity has formed a diversified portfolio of exploration projects on Alaska’s North Slope.
The three key projects include Project Icewine, Yukon leases and Project Peregrine with the assets at various stages of development, the company previously outlined this summer.
The duo said the combined company will have increased scale, market presence along with higher funding capability and trading liquidity across the ASX and London AIM exchanges.
Commenting on the merger, XCD’s Chairman Peter Stickland said the deal was “compelling” for its shareholders due to the “demonstrated operational capability” at Alaskan North Slope.
In September, 88E unveiled new seismic data analysis at Project Peregrine, an area that the group acquired alongside its merger with XCD, boosting exploration prospects at the site.
Post operating cash outflows of $1.12m in the period, 88E reported cash reserves as of 30 September 2020 of $4.68m compared to $6.84m in 2019.
Shares in 88 Energy have increased by 25% since September 2020 to open 2.78% higher this morning at 0.36p following the announcement.
Following the ‘very encouraging’ findings, 88 Energy said it has now opened a data room to potential exploration partners as part of the farm-out process for Project Peregrine.
88E revealed that multiple parties are at various stages of technical due diligence while several are now progressing into commercial discussions, it told investors.
The company said it is targeting a deal before the end of 2020, which would allow drilling in early 2021.
88E was also formally re-assigned the "Area A" leases at Project Icewine on Monday, meaning its working interest in around 40% of the project has increased from 30% to 75%.
It said an independent resource estimate at Icewine which will integrate the results of the recently successful Charlie-1 well is ‘due within weeks.’ Both an increase in acreage and the resource estimate are expected to facilitate ongoing farm-out discussions at Icewine.
The Company highlighted that a new farm-out process will follow the release of the report.
Meanwhile, 88E highlighted to investors that talks are continuing in regard to the Yukon acreage to optimise the monetisation strategy of the acreage, with permitting continuing for future potential. The Company is also planning to bring this project area to a farm-out.
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