The 88 Energy share price has crashed almost 50% to less than 1.7 Australian cents, almost halving shareholder value in a day.
88 Energy Limited told their shareholders today that one of their flagship wells (Merlin-2) wireline logging program was nearing completion. The program was designed to evaluate the potential associated with the oil and mud gas readings in target zones.
The primary objective of Merlin-2 was initially intended to collect hydrocarbon samples. Unfortunately, the company announced today that they were unable to achieve this using MDT (Modular-Formation Dynamics Testing) due to the tightness of the formation.
All in all, despite highly positive oil shows and Logging While Drilling (LWD) there unable to obtain fluid samples from their well. Taking all this into consideration, 88 Energy will now need to demobilize their major works at the Merlin-2 well and move to other target zones.
Managing Director Ashley is still bullish on the stock in the long term and stated:
“We appreciate that this result will be disappointing news for shareholders… 88 Energy remains in a strong financial position, post the Merlin-2 well, with zero debt and a healthy cash balance that will be further strengthened with projected cash flows from the recently acquired portfolio of Texas production assets, Project Longhorn.”