88 Energy Share Price Savaged on Winx-1 Final Report
At time of writing, the share price of 88 Energy Limited [ASX:88E] has been savaged, dropping 44%, trading at 1.4 cents.
From previous peaks in April and June of 2018, the share price fell and then flat-lined until their most recent announcement:
Disappointing results drive 88 Energy share price down
From the announcement:
‘Provisional petrophysical analysis of the wireline logging program indicates low oil saturations in the primary Nanushuk Topset objectives; testing and fluid sampling indicates that reservoir quality and fluid mobility at this location is insufficient to warrant production testing, despite encouragement from oil shows and logging while drilling (LWD) data.’
‘Zones of interest in the Torok formation, secondary objectives, were identified on wireline logs, which similarly exhibited low oil saturations and did not flow hydrocarbons during the Modular Formation Dynamics Test (MDT) pressure testing and fluid sampling program.’
The Managing Director of 88 Energy, Dave Wall, had this to say about the results:
‘We appreciate that this is disappointing for investors but, at the same time, we look to the future and continue our forward path to ultimate success at our projects in Alaska.’
Is there hope for 88 Energy?
It’s hard to say at this point, much may depend on future farm-out arrangements.
Winx-1 is not its only property and below you can see a timeline of its other projects:
Source: 88 Energy Limited
Its cash and cash equivalents at the end of the quarter ending 31 December 2018 was around $21.7 million, so it has some room to manoeuvre in the immediate future.
That being said, it did go through $3.179 million during this period.
With regards to its Project Icewine — Conventional Farm-Out endeavour, the company has previously said that,
‘The level of interest and the calibre of parties visiting the virtual and physical dataroom remained highly encouraging. The Company is seeking to attract a farminee to fund and participate in the exploration and appraisal drilling of the significant prospectivity delineated on the Western Play Fairway and to further the exploration effort on the Central and Eastern Leases.’
However, when investors will know more about potential farm-out arrangements is an unknown at this stage.
For Money Morning
PS: Read this free report to discover Jason Stevenson’s top 10 picks for investing in Aussie resource stocks. Click here to claim yours today.