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88 Energy anticipates Icewine farm-out decision in June

A deal for the conventional portion of the Project Icewine asset is expected in the coming weeks, while the formal process for the shale project will come later in the year.

oil and gas operations
Due diligence is now largely complete

88 Energy Ltd (LON:88E) shares rose on Thursday after the explorer told investors that a final decision is expected next month for the anticipated farm-out of interests in the conventional portion of Project Icewine in Alaska.

In a statement, the company said that the process is continuing with the preferred bidder and third party due diligence work is now largely complete.

For the unconventional portion of Project Icewine, it noted that the formal farm-out process has been deferred into the second half of 2019 though ‘soft’ farm-out activity is presently underway with interested parties.

READ: continues to look forward to an Icewine farm-out

New analysis of the shale discovery has significantly advanced the understanding of the HRZ ((Highly Radioactive Zone) shale play, 88 Energy added.

It highlighted that the majority of its acreage remains within revised prospectivity fairway and that the disappointing Icewine-2 well is now seen to be marginally outside the revised fairway.

"Final decision on approval for the conventional farm-out is now scheduled for June 2019 and we remain optimistic of a favourable outcome for our shareholders in the very near term,” said Dave Wall, 88 Energy;s managing director.

“It is also encouraging that recent analysis of the HRZ provides both some answers as to why Icewine#2 did not flow as expected but also that the play remains prospective on our leasehold."

The company also updated on the ‘Yukon leases’ where talks are underway with owners of nearby resources with a view to optimising a monetisation strategy, while at the ‘western blocks’ data aggregation work is continuing and the company is tendering for reprocessing work slated for the third quarter.

In afternoon trading, shares in 88 Energy were 8.6% higher at 0.82p.

 -- Adds share price --

Quick facts: 88 Energy Ltd

Price: 1.173 GBX

AIM:88E
Market: AIM
Market Cap: £83.4 m
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