88 Energy Limited (OTCMKTS:EEENF) Stock In Focus After Acquiring New Oil Assets
88 Energy Limited (OTCMKTS:EEENF) dropped 6% last week. The company has announced that it has executed a binding Securities Purchase Agreement further to the recently signed non-binding Memorandum of Understanding.
Market Stats
On Friday, EEENF stock fell 2.40% to $0.0285 with 32.20 million shares, compared to its average volume of 63.67 million shares. The stock moved within a range of $0.0273 – 0.0288 after opening trading at $0.0280.
88 Energy : Acquisition of Texas Oil and Gas Production Assets
The agreement is for the purchase of a circa 73 percent working stake in established gas and oil production assets in the Permian Basin in Texas. Project Longhorn is a collection of oil and gas producing resources in the Permian Basin that include independently proven net 2P resources of 2.1 MMBOE. The acquisition cost $9.7 million, which includes $7.2 million in cash and $2.5 million in the company’s shares.
With present gross output from Project Longhorn of over 300 BOE per day, the purchase provides quick cash flows (approximately 70 percent oil). In addition, seven scheduled work-overs, set to begin in March 2022, will provide near-term capital-effective production gain. By the end of 2022, these projects should have doubled present output rates. So in the coming weeks, investors should keep an eye on EEENF.
Key Quote
88 Energy Managing Director and CEO, Ashley Gilbert, commented:
“While our core focus remains exploration of our world-class Alaskan North Slope acreage, the acquisition of Project Longhorn provides 88 Energy with immediate cash flow and direct exposure to any further strengthening in energy prices. It also delivers optionality for incremental, low-capital, rapid payback reinvestment in the region.”
Traders Corner
EEENF stock is trading above the 50-Day and 200-Day Moving averages of $0.0253 and $0.0231 respectively. However, the stock is trading below the 20-Day moving average of $0.0302.
