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.
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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.
