88 Energy has picked up more ground in Alaska in line with its growth strategy for the region.
The Perth-based company, in conjunction with joint venture partner Burgundy Xploration, was confirmed as the highest bidder on 174,240 acres yesterday at the North Slope Area bid sale.
The JV has contributed a non-refundable 20 per cent down payment of US$947,000 to secure the rights to the acreage. Finalisation of the acquisition is subject to formal award and payment of the remainder of the bid plus acre rentals for a total of about US$5.5 million.
As a result of the acquisition, the JV now holds a gross acreage position of 272,242 acres in Alaska which is almost triple that prior to purchasing the ground.
More importantly, the North Slope acreage has more than doubled the conventional play potential at the JVs Icewine project, while the HRZ shale play potential is now internally estimated at over 2 billion barrels recoverable across the expanded acreage position.
Separately, 88 Energy has announced plans to undertake a small capital raising which is being finalised.
The capital raising will include a share purchase plan component to enable participation from all eligible shareholders.
“After shareholders have contributed $20 million to Project Icewine, it is strategically imperative to secure the dominant position in the play ahead of the results of the Icewine 1 well,” 88 Energy managing director Dave Wall said.
“We do not want to prove up a play and then have someone else acquire a large portion of it.
“Additionally, downside risk has been mitigated as we now have a greater chance that the HRZ or one of the conventional plays will work somewhere on the expanded acreage position.”
88 Energy had initially anticipated first spud at Icewine to occur in mid-October, however drilling was delayed after the Alaska Oil and Gas Conservation Commission requested additional information from the JV.
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