TIDM88E
RNS Number : 5157G
88 Energy Limited
27 July 2021
This announcement contains inside information
QUARTERLY ACTIVITIES REPORT
For the quarter ended 30 June 2021
88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or
the Company) provides the following report for the quarter ended 30
June 2021.
Highlights
Project Peregrine (100% WI)
-- Completion of Merlin-1 drilling program in April 2021.
-- Initial petrophysical interpretation of wireline logs
indicated several potential pay zones in the Merlin-1 well and side
wall cores obtained from the well confirmed presence of oil.
-- Following completion of the drilling program, the post well
testing program commenced on sidewall cores, cuttings, mud gas and
fluid samples from Merlin-1.
-- Geochemical analysis of fluid extracts from selected core
samples definitively demonstrated presence of hydrocarbons.
-- Initial mapping of additional prospective zones encountered
in Merlin-1 suggests upside potential.
-- Acquisition of residual 50% working interest from APDC in
exchange for US$14M in shares plus 1.5% ORRI and bonus milestone
payments.
Umiat Oil Field (100% WI)
-- Initial studies conducted in conjunction with the Merlin-1
post well testing and analysis have identified additional upside at
the Umiat oil field.
Project Icewine (75% WI)
-- Early results from nearby Talitha-A well encouraging, with
potential for extension into 88E leases.
-- 88E internal geoscience team looking to reassess the potential across the acreage.
Yukon Leases (100% WI)
-- Discussions continue to advance with nearby lease owners for joint development area.
-- Planning for potential future exploration drilling ongoing
subject to farm-out and other discussions.
Corporate / Finance
-- Ashley Gilbert appointed Managing Director and Sarah Smith appointed Company Secretary.
-- Sale of Alaskan Oil and Gas Tax Credits for US$18.7M;
proceeds applied towards full repayment of outstanding 88E debt
(US$16.1M).
-- Cash at 30 June of A$14.8M and zero debt.
Project Peregrine (100% WI)
Merlin-1 exploration well
The Merlin-1 well was spudded in March 2021 and targeted 645
million barrels of gross mean prospective resource. With drilling
operations completed in April 2021, 88 Energy commenced the post
well testing program on the samples and data obtained during the
drilling of the Merlin-1 well. Figure 1** provides an overview of
the samples taken during drilling and related testing program and
results received to date or pending receipt.
Overview of Merlin-1 post well testing program progress
Merlin- 1
RDT fluids Sidewall core Cuttings
----------------------------------------- ---------------------
PVT flashing PVT flashing RCA and SCAL Alternative VAS
(field) (lab) core program
and Geochem
------------------ ------------------- -------------------- ---------------------
All 3 Depths Isotopes indicate Additional 2 / 5 initial Awaiting results.
showed evidence thermogenic core fluorescence screening
of up to 65% oil source. noted in lab samples returned (to be completed)
HC saturation Samples tested photos, cuts evidence of
as water, observed across hydrocarbons.
more prospective multiple trims.
zones not
sampled
------------------ ------------------- -------------------- ---------------------
Further work NMR to ascertain 13 more samples Processing
needed to physical and depths to of over 120
reconcile mechanical undergo screening. direct measurements
field flash properties and initial
results. of reservoirs (to be competed) interpretation
of results.
(to be competed) (to be completed)
(to be completed)
------------------ ------------------- -------------------- ---------------------
Side wall cores
The sidewall cores taken in the Merlin-1 well were analysed at
surface prior to being sent to the laboratory for further testing.
Photos of whole core and small chips from the core were taken in
white and ultraviolet light to determine fluorescence. The rock
chips were also exposed to solvent to observe any "cut".
Fluorescence and cut are indicators of the presence of oil.
Fluorescence and cut were observed over several horizons,
confirming the observations previously reported based on cuttings
(see 88E release dated 29 March 2021). The cores were subsequently
sent to the laboratory for further analysis.
Whilst preparing the side wall cores for further testing, white
and UV light photography was undertaken. If oil is present, then
fluorescence will be evident under UV light. Multiple horizons were
identified as having oil present during drilling via observation of
fluorescence under UV light and also using solvent (or cut) to
determine whether oil would leach out from the samples. The
observations in the lab of the side wall cores are largely
confirmatory of these previous analyses; however, several horizons
showed evidence of oil, which were not previously identified. Some
of the fluorescence observed in the lab is shown in Figure 2**
(notably, 18 of the most prospective samples were not included as
they were set aside for special analysis related to any oil
extracted).
During and post the end of the quarter, Phase One geochemical
results were received for the 18 specifically selected trims from
the Merlin-1 side wall cores (see 88E release dated 14 July 2021).
Nine (9) of these 18 trims confirmed the presence of
hydrocarbons.
The nine (9) trims which confirmed the presence of hydrocarbons
were at depths that were among the most prospective zones noted
during drilling as well as during post well testing analysis.
Significantly, these depths were among the prospective zones that
were not able to be tested with the RDT(TM) downhole fluid
extraction tool. These zones also correspond with depths where good
oil shows were noted during drilling, including petroliferous
odour, fluorescence and cut.
The high resolution gas chromatography (HRGC) charts in Figure
3** are from a selection of the nine (9) trims which showed
evidence of hydrocarbons. These charts show a spread of carbon
compounds with lighter molecules on the left and heavier components
on the right. Oil signatures may be inferred by the presence of
heavier carbon compounds seen in these two samples.
Phase Two of the geochemical analysis program on the sidewall
core trims has commenced. This includes quantitative extraction,
SARA, isotopes and biomarkers analysis. Phase Two results are
expected to be received in the next few weeks, with the analysis
designed to confirm not only the presence of oil but also the
nature of the source rock. This is targeted at enhancing
understanding of the likely quality of the oil as well as migration
pathways, which is critical for understanding regional implications
on prospectivity across Project Peregrine.
RDT (TM) test results
The second run of the Merlin-1 wireline program was conducted
with the RDT(TM) tool which is designed to take fluid samples
across selected zones. Initial observations indicated the presence
of an oil signature in the fluid using an optical fingerprint
sensor in the downhole sampling tool, after communication was
established with the reservoir in the deepest zone of interest.
Slugging of hydrocarbon and water then occurred, which is often a
precursor to hydrocarbon flow from the reservoir. However, a power
outage due to equipment failure necessitated pulling out of the
hole for repairs prior to any sample being obtained.
After repairs were completed, the run back in hole encountered
several sticky sections, indicating poor hole condition, so a clean
out run was undertaken. Re-entry with the sampling tool was then
executed to move to the lowest zone for testing but good
communication was not able to be re-established with the reservoir
despite observation of a similar hydrocarbon signature on the
optical fingerprint sensor. The time the hole had been open and
consequent potential formation damage may have contributed to this
issue.
A decision was made to move to the next shallowest prospective
zone, which had exhibited good oil shows and petrophysical
characteristics, but wellbore condition issues prevented a test as
the tool became stuck. The tool was freed but the risk of returning
to that zone was deemed too high.
Significantly, one of the most prospective zones encountered in
Merlin-1 is considered to be a new prospective horizon within the
Nanushuk Formation that may be wholly within the Project Peregrine
acreage and was not one of the pre-drill targets. Further work,
integrating the results from logging with the seismic, is required
to map / re-map the volumetric potential of these zones.
Several samples were taken in zones interpreted to be less
prospective on the way out of the hole, which were sent to a
laboratory for post well testing.
The raw data from the RDT(TM) logging run was processed and
presented in a final report. The results are shown in Figure 4**
for two of the samples where the pressure was taken to below 100psi
(atmospheric pressure is 15psi); the pressure in the third sample
was only decreased to 403psi.
It is important to note that whilst the percentages of
hydrocarbon in the Figure 4**
images reach up to 70% of the sample (which would be indicative
of a discovery), the results are deemed qualitative, and the margin
of error is uncertain. Therefore, further investigation is required
to validate the actual percentage of hydrocarbon in the
samples.
The ratios of hydrocarbon indicate that the liquid present is
highly likely to be oil rather than condensate, which also bodes
well from a thermal maturity perspective regionally. These horizons
had previously been deemed to contain mostly water and this remains
a possibility. Regardless of the final percentages of hydrocarbon
versus water in these samples, the presence of oil is highly
encouraging particularly given that the two most prospective
horizons were not able to be sampled due to the operational
issues.
Mud gas Isotopes
Mud gas samples collected in Isotubes whilst drilling were sent
to the lab for analysis following the completion of well site
activities. This study looks at the ratios and quantities of carbon
isotopes in the samples which provide valuable information about
their source. Encouragingly, a marked increase in the C2+ level in
deeper samples "strongly suggest reservoir hydrocarbons" and
thermal maturities indicate the source rock to be in the "heart of
the oil window". In combining and summarising these results, "all
indications are that deeper mud gas samples come from a "reservoir
oil accumulation".
Pending results
Remaining Merlin-1 post well evaluation results still to be
received and processed by 88 Energy are:
-- NMR and Dean stark (for porosity, salinity and saturation measurements).
-- Core sample petrography (from thin sections).
-- Permeability measurements (Klinkenberg method as well as OB pressure).
-- Final VAS results (correlating initial "blind" results with
wireline logs and stratigraphic tops).
-- Phase Two geochemistry: specifically focussed on typing the
hydrocarbons as well as determining saturations.
Following receipt and processing of the above results, an
integrated Merlin-1 summary will be finalised. 88 Energy is looking
forward to presenting the final, aggregate Merlin-1 results to
shareholders, the implications of which will determine the
forward-looking plan for exploration efforts in the NPRA Alaska
next season.
Merlin-1 well costs
Costs associated with the Merlin-1 well have now been largely
finalised, with all major invoices paid. 88 Energy's net share of
well costs is estimated at approximately US$9 million, inclusive of
wireline costs and additional costs associated with operational
issues during the wireline program.
Acquisition of APDC 50% interest in Project Peregrine
On 7 June 2021, 88 Energy announced that it had entered into an
agreement to acquire the 50% working interest in Project Peregrine
held by Alaska Peregrine Development Company, LLC (APDC) in
exchange for consideration of:
-- US$14 million, payable in new 88 Energy shares, which were
issued in several tranches and were subject to a final
reconciliation mechanism;
-- 1.5% overriding royalty interest on future production from the Project Peregrine licences;
-- US$10m cash payment on the achievement of gross 2P reserves
of 100 million barrels within 36 months;
-- Cash payments of US$2.5m per 50 million barrels on the
achievement of gross 2P reserves added over 100 million barrels
within 36 months (capped at 5 additional cash payments); and
-- 10% of the gross sale proceeds in respect of an assignment of
greater than 49% of Project Peregrine within 24 months, excluding a
bona fide farm-out.
The acquisition was completed post quarter end and all
consideration shares have been issued (see 88E release dated 15
July 2021).
88 Energy now holds a 100% working interest in Project
Peregrine.
Umiat Oil Field (100% WI)
Studies have commenced to review the historical Umiat oil field
development plans prepared by Linc Energy, which formed the basis
of the Ryder Scott 2015 reserves report. Initial results of the
internal review and studies have identified potential cost savings
on planned development CAPEX, as well as alternative potential
routes to market for the crude, which could include a potential
tie-in to the Willow oil field development to the north of the
acreage.
In addition, initial studies conducted in conjunction with the
Merlin-1 post well testing and analysis have identified additional
upside at the Umiat oil field.
Project Icewine (75% WI)
88 Energy has been closely monitoring activity nearby to the
northern border of its Project Icewine acreage, where a flow of
light oil from the Kuparuk has been reported from the Talitha-A
well (see Pantheon Resources (AIM:PANR) release dated 19 April
2021).
Additional insights into the wettability of the Kuparuk
formation have also been highlighted as part of the results from
Talitha-A, which may have positive ramifications for 88 Energy's
previous interpretation of this horizon.
All three wells drilled by 88 Energy at Project Icewine have
encountered good quality reservoir in the Kuparuk formation, with
indications of hydrocarbons. These had previously been interpreted
as likely gas condensate or residual oil and no mapped targets had
been identified - given this was not a play that 88 Energy was
pursuing.
The results at Talitha-A are highly encouraging regionally for
the Kuparuk, including across Project Icewine. The 88 Energy
internal geoscience team is looking to reassess the potential
across the acreage.
Yukon Leases (100% WI)
The Yukon Leases contain the 86 million barrel Cascade
Prospect*, which was intersected peripherally by Yukon Gold-1,
drilled in 1994, and classified as an historic oil discovery.
88 Energy more recently acquired 3D seismic (2018*) over Cascade
and, on final processing and interpretation, high-graded it from a
lead to a drillable prospect. The Yukon Leases are located adjacent
to ANWR and in close proximity to recently commissioned
infrastructure at Point Thompson.
Advanced discussions and negotiations with nearby lease owners
continued during the quarter. All parties are seeking to capture
the potential to aggregate discovered resources located in the
vicinity of the Yukon Leases as part of a joint development of the
area.
Table 1: Yukon prospective oil resource
YUKON LEASES
-----------------------------------------------------------------------------
Prospective Oil Resource (Unrisked) MMBO
----------------------------------------- ----------------------------------
Prospects & Formation / Play Low Best High Net Mean
Leads to 88E
----------------- ---------------------- ------ ------ ------ ----------
Cascade Canning / Fan 23.7 64 162 82.3
----------------- ---------------------- ------ ------ ------ ----------
Staines Tongue
PETM1 / Topset 3.3 5.7 9.9 6.2
----------------- ---------------------- ------ ------ ------ ----------
Staines Tongue
PETM2 / Topset 0.2 0.8 2.3 1.1
================= ---------------------- ------ ------ ------ ----------
TOTAL PROSPECTIVE OIL RESOURCE 89.6
----------------------------------------------------------------- ----------
Planning for potential future exploration drilling is ongoing
subject to farm-out and other discussions.
(*) Refer 88E release dated 7 November 2018
Cautionary Statement: The estimated quantities of petroleum that
may be potentially recovered by the application of a future
development project relate to undiscovered accumulations. These
estimates have both an associated risk of discovery and a risk of
development. Further exploration, appraisal and evaluation are
required to determine the existence of a significant quantity of
potentially movable hydrocarbons.
Corporate / Finance
Mr Ashley Gilbert was appointed to the role of Managing Director
and CEO during the quarter, post the resignation of Mr David Wall.
Ms Sarah Smith was appointed to the role of Company Secretary
during the quarter.
On 30 June 2021, 88 Energy and its subsidiaries announced that
it would adopt the Environmental, Social and Governance (ESG)
framework developed by the World Economic Forum (WEF). This
framework is regarded as the global standard for ESG reporting and
encompasses 21 core metrics and disclosures. The Company has
engaged independent impact monitoring technology provider,
Socialsuite, to assist with measuring, monitoring and reporting of
these core ESG metrics.
In June 2021, 88 Energy sold the Alaskan Oil and Gas Tax Credits
held by Accumulate Energy Alaska, Inc., a 100% owned subsidiary of
88 Energy. The sale price of the Tax Credits was US$18.7 million
cash (received during the quarter), with the majority of the
proceeds applied towards full repayment of 88 Energy's outstanding
debt of US$16.1 million.
At quarter end, 88 Energy held A$14.8 million cash and zero debt
(excluding typical trade creditors).
The ASX Appendix 5B attached to this report contains the
Company's cash flow statement for the quarter.
The significant cash flows for the period were:
-- Exploration and evaluation expenditure totalled A$11.7
million gross (March quarter: A$15.2M), primarily associated with
expenditure on Project Peregrine Merlin-1 well drilling.
-- Lease rental payments totalled A$1.1 million.
-- Cash call proceeds received from Joint Venture partners
during the quarter totalled A$5.9 million (March quarter:
A$7.7M).
-- Payments in relation to the debt facility interest totalled A$0.6 million (US$0.4M).
-- Administration and other operating costs, net of government
payments, totalled A$0.8 million and staff costs of A$0.5
million.
Subsequent to quarter end, 88E received a further US$5 million
in relation to the remaining cash call payments due from APDC. The
cash call funds received were applied fully against outstanding
creditors due in relation to Merlin-1 well of US$5.059 million.
Table 2: Information required by ASX Listing Rule 5.4.3
Project Name Location Area (acres) Interest Interest
at beginning at end of
of Quarter Quarter
-------------- -----------
Project Icewine Onshore, North Slope Alaska 193,000 75% 75%
------------------- ----------------------------- ------------- -------------- -----------
Yukon Leases Onshore, North Slope Alaska 15,235 100% 100%
------------------- ----------------------------- ------------- -------------- -----------
Onshore, North Slope Alaska
Umiat Unit (NPR-A) 17,633 100% 100%
------------------- ----------------------------- ------------- -------------- -----------
Onshore, North Slope Alaska
Project Peregrine (NPR-A) 195,373 100% 100%
------------------- ----------------------------- ------------- -------------- -----------
Pursuant to the requirements of the ASX Listing Rules Chapter 5
and the AIM Rules for Companies, the technical information and
resource reporting contained in this announcement was prepared by,
or under the supervision of, Dr Stephen Staley, who is a
Non-Executive Director of the Company. Dr Staley has more than 35
years' experience in the petroleum industry, is a Fellow of the
Geological Society of London, and a qualified Geologist /
Geophysicist who has sufficient experience that is relevant to the
style and nature of the oil prospects under consideration and to
the activities discussed in this document. Dr Staley has reviewed
the information and supporting documentation referred to in this
announcement and considers the prospective resource estimates to be
fairly represented and consents to its release in the form and
context in which it appears. His academic qualifications and
industry memberships appear on the Company's website and both
comply with the criteria for "Competence" under clause 3.1 of the
Valmin Code 2015. Terminology and standards adopted by the Society
of Petroleum Engineers "Petroleum Resources Management System" have
been applied in producing this document.
**All figures referred to in this announcement, descriptions of
which are listed below, can be viewed in the pdf version of this
announcement, available on the Company's website www.88energy.com
;
-- Figure 1: Overview of Merlin-1 post well testing program progress
-- Figure 2: Lab observed fluorescence under white and UV light
-- Figure 3: Hydrocarbon signature based on geochemical analysis
of fluid extracted from core trims
-- Figure 4: Results from two samples of the RDTTM analysis
-- Figure 5: Location of Umiat Oil Field
Media and Investor Relations:
88 Energy Ltd Tel: +61 8 9485 0990
Ashley Gilbert, Managing Director Email: investor-relations@88energy.com
Finlay Thomson, Investor Relations Tel: +44 7976 248471
Fivemark Partners , Investor and Tel: +61 410 276 744
Media Relations Tel: +61 422 602 720
Andrew Edge / Michael Vaughan
EurozHartleys Ltd Tel: + 61 8 9268 2829
Dale Bryan
Cenkos Securities Tel: + 44 131 220 6939
Neil McDonald / Derrick Lee
Appendix 5B
Mining exploration entity or oil and gas exploration entity
quarterly cash flow report
Name of entity
-----------------------------------------------------
88 Energy Limited
ABN Quarter ended ("current quarter")
--------------- ----------------------------------
80 072 964 179 30 June 2021
----------------------------------
Consolidated statement of cash Current quarter Year to date
flows (6 months)
$A'000 $A'000
1. Cash flows from operating
activities
1.1 Receipts from customers - -
1.2 Payments for
(a) exploration & evaluation - -
(b) development - -
(c) production - -
(d) staff costs (481) (1,010)
(e) administration and corporate
costs (821) (1,354)
1.3 Dividends received (see note - -
3)
1.4 Interest received - -
Interest and other costs of
1.5 finance paid (627) (1,053)
1.6 Income taxes paid - -
1.7 Government grants and tax - -
incentives
1.8 Other (XCD - redundancy payments) - -
---------------- -------------
Net cash from / (used in)
1.9 operating activities (1,929) (3,417)
----- ----------------------------------------------- ---------------- -------------
2. Cash flows from investing
activities
2.1 Payments to acquire or for:
(a) entities - -
(b) tenements (1,109) (4,203)
(c) property, plant and equipment - -
(d) exploration & evaluation (11,788) (27,016)
(e) investments - -
(f) other non-current assets - -
2.2 Proceeds from the disposal
of:
(a) entities - -
(b) tenements - -
(c) property, plant and equipment - -
(d) investments - -
(e) other non-current assets - -
2.3 Cash flows from loans to other - -
entities
2.4 Dividends received (see note - -
3)
2.5 Other - Joint Venture Contributions 5,937 13,676
* Proceeds from sale tax credits 3,324 3,324
260 (387)
* Bonds
---------------- -------------
Net cash from / (used in)
2.6 investing activities (3,376) (14,606)
----- ----------------------------------------------- ---------------- -------------
3. Cash flows from financing
activities
Proceeds from issues of equity
securities (excluding convertible
3.1 debt securities) 28 18,557
3.2 Proceeds from issue of convertible - -
debt securities
3.3 Proceeds from exercise of - -
options
Transaction costs related
to issues of equity securities
3.4 or convertible debt securities (74) (884)
3.5 Proceeds from borrowings - -
3.6 Repayment of borrowings - -
3.7 Transaction costs related - -
to loans and borrowings
3.8 Dividends paid - -
3.9 Other (provide details if - -
material)
---------------- -------------
Net cash from / (used in)
3.10 financing activities (46) 17,673
----- ----------------------------------------------- ---------------- -------------
4. Net increase / (decrease)
in cash and cash equivalents
for the period
Cash and cash equivalents
4.1 at beginning of period 20,060 14,847
Net cash from / (used in)
operating activities (item
4.2 1.9 above) (1,929) (3,417)
Net cash from / (used in)
investing activities (item
4.3 2.6 above) (3,376) (14,606)
Net cash from / (used in)
financing activities (item
4.4 3.10 above) (46) 17,673
Effect of movement in exchange
4.5 rates on cash held 53 265
---------------- -------------
Cash and cash equivalents
4.6 at end of period 14,762 14,762
----- ----------------------------------------------- ---------------- -------------
5. Reconciliation of cash and Current quarter Previous quarter
cash equivalents $A'000 $A'000
at the end of the quarter
(as shown in the consolidated
statement of cash flows) to
the related items in the accounts
5.1 Bank balances 14,762 20,060
5.2 Call deposits - -
5.3 Bank overdrafts - -
5.4 Other (provide details) - -
---------------- -----------------
Cash and cash equivalents
at end of quarter (should
5.5 equal item 4.6 above) 14,762 20,060
----------------- ----------------------------------- ---------------- -----------------
6. Payments to related parties of the entity Current quarter
and their associates $A'000
Aggregate amount of payments to related
parties and their associates included in
6.1 item 1 13
----------------
6.2 Aggregate amount of payments to related -
parties and their associates included in
item 2
----------------
Note: if any amounts are shown in items 6.1 or 6.2, your quarterly
activity report must include a description of, and an explanation
for, such payments.
6.1 Payments relate to Director and consulting fees paid to
Directors. All transactions involving directors and associates were
on normal commercial terms.
7. Financing facilities Note: Total facility Amount drawn
the term "facility' includes amount at quarter at quarter end
all forms of financing arrangements end $US'000
available to the entity. Add $US'000
notes as necessary for an
understanding of the sources
of finance available to the
entity.
7.1 Loan facilities - 16,008
------------------- ----------------
7.2 Credit standby arrangements - -
------------------- ----------------
7.3 Other (please specify) - -
------------------- ----------------
7.4 Total financing facilities - 16,008
------------------- ----------------
7.5 Unused financing facilities available at -
quarter end
----------------
7.6 Include in the box below a description of each facility
above, including the lender, interest rate, maturity date
and whether it is secured or unsecured. If any additional
financing facilities have been entered into or are proposed
to be entered into after quarter end, include a note providing
details of those facilities as well.
----------------- ----------------------------------------------------------------------------
On the 23rd of March 2018, 88 Energy Lt's 100% controlled
subsidiary Accumulate Energy Alaska Inc entered into a
US$ 16.5 million debt refinancing agreement to replace
the existing Bank of America debt facility. Debt was repaid
on 30 June 2021, refer to ASX Announcements.
-----------------
8. Estimated cash available for future operating $A'000
activities
Net cash from / (used in) operating activities
8.1 (item 1.9) (1,929)
8.2 (Payments for exploration & evaluation classified (11,788)
as investing activities) (item 2.1(d))
8.3 Total relevant outgoings (item 8.1 + item (13,717)
8.2)
8.4 Cash and cash equivalents at quarter end 14,792
(item 4.6)
8.5 Unused finance facilities available at quarter -
end (item 7.5)
---------
8.6 Total available funding (item 8.4 + item 14,762
8.5)
---------
Estimated quarters of funding available
8.7 (item 8.6 divided by item 8.3) 1.1
---------
Note: if the entity has reported positive relevant outgoings
(ie a net cash inflow) in item 8.3, answer item 8.7 as
"N/A". Otherwise, a figure for the estimated quarters
of funding available must be included in item 8.7.
8.8 If item 8.7 is less than 2 quarters, please provide answers
to the following questions:
8.8.1 Does the entity expect that it will continue to
have the current level of net operating cash flows for
the time being and, if not, why not?
-------------------------------------------------------------------
Answer: 8.2 relates to the costs with the Merlin-1 well
which are fully covered by existing cash reserves and
Joint Venture partner contributions. The Merlin-1 expenditure
will be minimal in the third quarter with drilling operations
completed.
-------------------------------------------------------------------
8.8.2 Has the entity taken any steps, or does it propose
to take any steps, to raise further cash to fund its operations
and, if so, what are those steps and how likely does it
believe that they will be successful?
-------------------------------------------------------------------
Answer: There is no requirement to raise further funds
based on anticipated future expenditure as noted above.
-------------------------------------------------------------------
8.8.3 Does the entity expect to be able to continue its
operations and to meet its business objectives and, if
so, on what basis?
-------------------------------------------------------------------
Answer: Yes, please refer to responses above.
-------------------------------------------------------------------
Note: where item 8.7 is less than 2 quarters, all of questions
8.8.1, 8.8.2 and 8.8.3 above must be answered.
----------------- -------------------------------------------------------------------
Compliance statement
1 This statement has been prepared in accordance with accounting
standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters disclosed.
Date: 14 July 2021
Authorised by: By the Board
(Name of body or officer authorising release - see note 4)
1.1 Notes
1. This quarterly cash flow report and the accompanying activity
report provide a basis for informing the market about the entity's
activities for the past quarter, how they have been financed and
the effect this has had on its cash position. An entity that wishes
to disclose additional information over and above the minimum
required under the Listing Rules is encouraged to do so.
2. If this quarterly cash flow report has been prepared in
accordance with Australian Accounting Standards, the definitions
in, and provisions of, AASB 6: Exploration for and Evaluation of
Mineral Resources and AASB 107: Statement of Cash Flows apply to
this report. If this quarterly cash flow report has been prepared
in accordance with other accounting standards agreed by ASX
pursuant to Listing Rule 19.11A, the corresponding equivalent
standards apply to this report.
3. Dividends received may be classified either as cash flows
from operating activities or cash flows from investing activities,
depending on the accounting policy of the entity.
4. If this report has been authorised for release to the market
by your board of directors, you can insert here: "By the board". If
it has been authorised for release to the market by a committee of
your board of directors, you can insert here: "By the [name of
board committee - eg Audit and Risk Committee]". If it has been
authorised for release to the market by a disclosure committee, you
can insert here: "By the Disclosure Committee".
5. If this report has been authorised for release to the market
by your board of directors and you wish to hold yourself out as
complying with recommendation 4.2 of the ASX Corporate Governance
Council's Corporate Governance Principles and Recommendations, the
board should have received a declaration from its CEO and CFO that,
in their opinion, the financial records of the entity have been
properly maintained, that this report complies with the appropriate
accounting standards and gives a true and fair view of the cash
flows of the entity, and that their opinion has been formed on the
basis of a sound system of risk management and internal control
which is operating effectively.
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