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88 Energy Share Price Has Been Trading Sideways Since September. What’s Next?

Simon Mugo trader
Updated 3 Nov 2021

88 Energy Ltd (LON: 88E) share price has been stuck in a sideways trading range since September. So what’s next for the firm?

The oil firm’s last significant announcement was on October 26, 2021, when it signed a rig contract with Doyon Drilling Inc, allowing it to use the Arctic Fox rig to drill the Merlin-2 appraisal well at its Project Peregrine in Alaska.

88 Energy also made significant changes to its leadership team by appointing Philip Byrne as its non-executive chairman after its previous chairman Michael Evans retired on August 2, 2021. Byrne served as executive vice president of marketing, trading and commercial for Santos Energy, an Australian oil and gas producer.

The company also appointed Robert Benkovic as its chief operating officer, who previously served as group manager of reservoir engineering at Japanese oil company Inpex.

88 Energy shares were frozen from trading on August 30, 2021, after announcing plans to raise A$20 million via a share placement. The company’s shares have been stuck in a sideways trading range since then.

The oil and gas company’s prospects appear pretty promising given the significant progress made at its Umiat oil field and is Project Peregrine, which includes the Merlin-1 and two wells. Moreover, the firm now has complete control of Project Peregrine’s working interests.

Long term investors who believe in 88 Energy’s potential might find the current prices quite appealing, given that the shares barely moved after the significant dilution caused by the firm’s latest capital raise.

88 Energy repaid its $16.1 million debt pile with funds raised from selling its Alaskan oil and gas tax credits in July and is now debt-free a significant achievement. In addition, the recent capital raise leaves the firm in a solid financial position.

In most cases, a sideways trading range is usually followed by a surge higher or a plunge lower. However, based on the company’s solid fundamentals, a rally seems more likely than a downtrend.

*This is not investment advice. Always do your due diligence before making investment decisions.

88 Energy share price.

IG chart of 88 Energy share price 03-11-2021

88 Energy share price has been trading sideways since September. So what’s next for the firm?

Should you invest in 88 Energy shares?

88 Energy shares are traded on the London stock exchange's AIM market (the alternative investment market), which is the submarket specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are 88 Energy shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies.

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Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading