88 Energy Ltd (LON:88E) has raised $6.48mln of new capital as it advances the drilling of the Merlin-1 exploration well in Alaska,
The company entered into a share subscription deal with ELKO International, a contractor in the live drill programme – buying 360mln new shares at a price of 1.8 cents per share.
88 Energy highlighted that the price was marked at a 225% premium to a prior placing which ran in February.
It comes as the Merlin well is now being drilled down towards its primary Nanushuk targets.
“The endorsement of the project by ELKO as we enter the critical phase of the drilling is encouraging and will serve to fund the company’s share of the recently announced cost overruns,” said Dave Wall, 88 Energy managing director.
In an update, 88 Energy told investors that the ‘surface hole’ was successfully drilled to 1,512 feet as planned, surface casing has been set, and a blow-out preventer system has been tested.
Drilling is now progressing down towards the targets and the planned target depth of 6,000 feet.
The company noted that logging-whilst-drilling activities will initial indications from the well, followed by sophisticated wireline logging and sidewall coring.
Subject to results, the well will subsequently by flow tested.