Here's why the 88 Energy (ASX: 88E) share price is frozen today

Here's what we know about 88 Energy's trading halt.

| More on:
a man in a hard hat, high visibility vest and gloves holds a stop sign and holds up a hand in a halt gesture on a road.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The 88 Energy Ltd (ASX: 88E) share price is frozen today as it prepares to release news to the market.

The company's shares are halted at their previous closing price of 3.2 cents.

According to the oil and gas company's request for the trading halt, it's planning to announce news of a capital raise this week.

Let's take a closer look at 88 Energy's upcoming capital raise.

Why are 88 Energy's shares frozen?

The 88 Energy share price is on ice today as the company prepares to announce news of a capital raise.

88 Energy expects its share price will remain stagnant until Thursday morning at the latest.

The capital raise will be 88 Energy's second this year. In February, it raised $12 million in a placement. As part of the placement, sophisticated and institutional investors could get their hands on a piece of 88 Energy for 0.8 cents.

The 0.8 cent price tag represented a 27% discount on the 88 Energy share price's prior close of 1.1 cent.

Most of the funds from the February cash raise were earmarked to go towards the Project Peregrine's Merlin-1 well, along with its holding in the project's Harrier-1 well.

The obvious question regarding 88 Energy's soon-to-be-announced capital raise is: what does it need the extra cash for now?

In the company's recent half-year results, released earlier this month, it noted it has around $14.8 million of cash in the bank.

Additionally, 88 Energy paid off US$16.1 million of debt using funds from the sale of its Alaskan oil and gas tax credits in July. It is now debt-free.

However, earlier this month 88 Energy confirmed it has found light oil at Merlin-1. It also recently announced good news of its Umiat oil field. Finally, it was granted 100% of Project Peregrine's working interest in July.

Perhaps the market could soon be wowed with a flurry of activity from 88 Energy. It does appear to be primed to make moves on its big-ticket projects.

All may be revealed sometime between now and Thursday morning.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Energy Shares

Excited couple celebrating success while looking at smartphone.
Energy Shares

Paladin Energy share price races higher on big announcement

Let's see why this uranium producer's shares are charging higher today.

Read more »

Oil worker using a smartphone in front of an oil rig.
Share Market News

ASX 200 up strongly while energy shares plummet on ceasefire news

ASX 200 energy shares are tumbling with Karoon Energy and Woodside Energy the biggest fallers.

Read more »

An oil worker assesses productivity at an oil rig as ASX 200 energy shares continue to rise.
Share Market News

ASX 200 energy shares lead for the second week as world awaits US decision on Iran

ASX energy shares lifted 5.31% while the ASX 200 fell 0.49% amid the US President contemplating strikes.

Read more »

Copal miner standing in front of coal.
Energy Shares

What happened to Coronado Global Resources shares on Friday?

The ASX coal miner announced new funding this week.

Read more »

Gas and oil worker working on pipeline equipment.
Energy Shares

The pros and cons of buying Woodside shares this month

Is this ASX energy share a great opportunity right now?

Read more »

A miner stands in front of an excavator at a mine site.
Energy Shares

What's happening with ASX uranium stocks amid Sprott doubling investment to $200M

ASX investors have witnessed share price gains of up to 30% for the largest uranium stocks this week.

Read more »

Workers inspecting a gas pipeline.
Energy Shares

Woodside signs deal to supply Malaysian company with gas for 15 years  

It’s been a good month for Woodside shareholders with the company’s stock gaining 17%.

Read more »

Excited couple celebrating success while looking at smartphone.
Energy Shares

This ASX 200 uranium stock is charging higher on big news

This uranium producer is delivering the goods. Let's see what it announced.

Read more »