88 Energy Limited (LON:88E) has told investors it is minimising spending as it awaits clarity over its oil exploration assets in Alaska.
It comes in the first days of the Biden administration which has seen the United States seek to rejoin the Paris Accords and row back on certain Trump policies in the energy sector.
The company said it is seeking clarification on a recently announced 60-day suspension of authority for the US Department Bureaus and Offices in relation to the issuance of new drilling permits on Federal land.
An application for a drill permit was submitted on January 12, 2021, and was expected to be approved within a standard 30-day timeframe - that would be due by February 12.
The group added that it has been in close communication with the Bureau of Land Management regarding the interpretation and implementation of the 60-day suspension.
The Bureau has indicated it will continue to process the permit to drill in anticipation of receiving a signature on or before February 12, the company said.
It also highlighted a cause for optimism due to the advanced nature of the company’s existing operations – mobilisation for the Merlin exploration well, part of the Peregrine project, has begun in recent days.
"At this time it is uncertain whether this will have an impact on operations. We anticipate being able to get clarity on the situation within the next week,” said 88 Energy managing director Dave Wall in a statement.
“We have a strong case to be granted the permit given the many permits that have already been granted as well as our considerable, and ongoing, operations in the field," he added.
In Australia, trading in 88 Energy shares have been halted but remain open for trading on London’s AIM market. The share was down 19.45% in Friday’s early deals.
88 Energy, just hours earlier, had announced the start of mobilisation for snow road construction equipment to the Merlin-1 drill site.
It also noted that Lease AA095899 in the recent Coastal Plain lease sale had been formally awarded to the company.