88 Energy surges after securing credit facility for Alaska project

88 Energy surged on Monday after saying it has secured a $50m credit facility with Bank of America that will enable the company to fund its Icewine Project in Alaska.

Under the terms of the agreement, which follows the completion of a detailed due diligence on the project by the bank, 88 Energy will contribute around $5.7m of its own money, which includes its equity contribution towards the authority for the expenditure of the well, interest on the equity contribution and structuring fees.

The company said that along with a recent successful equity raising, the credit facility will ensure it is fully funded for its Icewine exploration well, which remains on track to spud this October.

Managing director Dave Wall said: “With 88 Energy fully funded for drilling, the company can now complete the ramp-up of activity related to its first exploration well onshore in Alaska, Icewine number 1.

“Anticipated spud is only around two months away and we look forward to updating shareholders on our progress as we aim to unlock a world class oil resource. Costs associated with the drilling of Icewine number 1 are eligible for up to 85% in cash rebates under the Alaskan government credit scheme.”

At 1000 BST, shares in 88 Energy were up 10.3% at 0.52p.