88 Energy Limited

4011
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One of the hand full of companies operating in the far north of Alaska is 88 Energy Limited (EEENF). The company was originally founded in February of 1996 and is headquartered in Perth Australia. They operate 2 large projects and one smaller project. The first project is about 200,000 net acres at project Icewine and the second is 195,000 acres at project peregrine. The third project is 15,312 acres and is leased in the Yukon. All three projects aim to target oil in northern Alaska and the results of the analyses on the projects are expected to be released to the public in late 1Q of 2021, with great anticipation from investors.

            Project Icewine is an onshore contiguous site that is about 200,000 acres, located in an area in Alaska’s that is known for being oil rich. The land was confirmed to have large oil and condensate repositories and is expected to be further appraised for more accurate findings. The project site has a 78% working interest and would be leased for 7-10 years with a 16.5% royally for the land holders. The site is located in the middle of the project with a high expectations due to its strategic location and its proximity to the 13 billion barrel Prudhoe Bay Oil Field.

            The second site, Project Peregrine in Alaska spans about 195,000 acres and is fully owned by EEENF in NPR-A. The site was acquired after the takeover of XCD Energy Ltd and the company is expecting significant prospects on the land due to recently discovered fields. Drilling on the land started in March of 2021 with a $10 million farm-out after the acquisition of the land from XCD Energy. 

The company also has a 100% lease in the Yukon of Alaska and is the Cascade project, which is the third project, with a size of about 15,312 acres. Despite being smaller is acreage than Project Peregrine and Project Icewine, the land contains historic oil discoveries and is near commissioned infrastructure. The land was acquired due to its strategic location and low cost, especially considering 3D seismic trials revealed about 86 million barrels of resources in 2018. All three projects combined total about 410,312 acres in northern Alaska that hold significant potential of future growth and discoveries.

Above: A map of the Cascade project that is highlighted with the Yukon Gold, which contains 86 million barrels of oil.
Above: An overview of the North Slope in Alaska, Highlighting the projects of EEENF and other companies that are located near each other. Note the close proximity of EEENF’s sites to the other established sites that produce oil and gas.

The company’s stock, which trades on the over-the-counter with the ticker symbol, EEENF, was first introduced in November of 2020 at a share price of just 0.001 cents, less than a penny. With the release of the various projects in Alaska, the company’s stock has seen significant gains in the past few months, rising to a height of $0.071. The majority of the gains the stock experienced has happened in March, with more and more investors discovering the stock and anticipation of the discoveries which are set to happen in early 2021. Although the company is headquartered in Perth Australia, the stock only trades in the United States dollar and not the Australian Dollar.

As of 31 December 2020, EEENF has $14,845,347 in cash and cash equivalents and net assets of $58,911,353. The company’s revenue at the end of the same period totaled $246,778, with an after tax net loss of $22,033,633. The losses are mainly attributed to the exploration, discovery and admin costs the company is currently paying. The remaining cash and cash equivalents will be primarily used for the exploration on the project sites the company currently has under contract. The market capitalization of EEENF is about $410 million, with a 12.52 billion shares outstanding.

An interest aspect of the Australian company is the capital structure and the investors that have backed the company, which range from the owner of the company, to multibillion dollar British banks. The top 10 investors in the company are as follows:

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1HARGREAVES LANSDOWN (NOMINEES) LIMITED (15942)758,517,2928.49
2HARGREAVES LANSDOWN (NOMINEES) LIMITED395,981,4694.43
3HARGREAVES LANSDOWN (NOMINEES) LIMITED355,433,6953.98
4INTERACTIVE INVESTOR SERVICES NOMINEES LIMITED334,678,5043.75
5INTERACTIVE INVESTOR SERVICES NOMINEES LIMITED311,573,0633.49
6BARCLAYS DIRECT INVESTING NOMINEES LIMITED276,436,7383.09
7HSDL NOMINEES LIMITED232,576,2382.60
8HSDL NOMINEES LIMITED207,168,0092.32
9HSBC CLIENT HOLDINGS NOMINEE (UK) LIMITED <731504>142,547,2841.60
10SHARE NOMINEES LTD120,535,6821.35

The Biden Administration is set to pause new oil and gas leasing from federal lands in a move that is aimed at reducing greenhouse gases and addressing climate change. It would limit the lease of federal land for energy exploration in the future, but would not stop the current leases that have already been signed. The permits that have been issued by the previous administration remain valid and will allow companies to continue drilling for years to come, whether in Alaska, New Mexico or Wyoming.

The leases belonging to EEENF have already been signed and completed, being protected due to being private leases. The impact of the current administration can also be reduced by companies that have acquired enough permits before the ban to last them for years into the future. This would allow companies like EEENF to operate despite a ban.

Above: A graph showing the cost of oil since 1997 with the corresponding evens that lead to the price of oil increasing and decreasing.

Although the impact of the Corona Virus (Covid-19) can still be seen in almost every industry that uses oil and gas directly or indirectly, such as tourism, commuting and logistics. The demand of oil and gas have been increasing steadily since the start of 2021 (See graph above) and the price of oil will continue to increase in the coming months and years as the global economy starts to improve and rebound, making EEENF an excellent prospect to invest in.

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This article was written by a guest contributor who is long shares of EEENF and solely reflects his/her opinions.  All information contained herein as well as on the EmergingGrowth.com website is obtained from sources believed to be reliable but not guaranteed to be accurate or all-inclusive. The statements in this article are not that of,  nor have they been verified by, or are the opinion of, EmergingGrowth.com. All material is for informational purposes only, and should not be construed as an offer or solicitation to buy or sell securities. The information includes certain forward-looking statements, which may be affected by unforeseen circumstances and / or certain risks. Please consult an investment professional before investing in anything viewed within.