88 Energy (EEENF): Nickels, Dimes, Quarters, Dollars

88 Energy (EEENF) is an oil & gas play that we first told our subscribers about on March 13th when the stock was just $.015 a share. As you can see from the chart below, EEENF is a fresh play that is just starting to get noticed. 88 Energy (EEENF) Daily ChartWe said that EEENF could turn into a runner after what had just happened with MDM Permian (OTCMKTS: MDMP). MDMP was the top OTC stock mover with a 5 day gain of 2,850%!! MDM Permian (OTCMKTS: MDMP) Daily ChartOnce MDMP ran, we knew that other oil & gas plays were due to run as well as penny stock investors went looking for the next big runner.This is what we do at Insider Financial. We scan through hundreds of OTC stocks each week looking for the best alerts for our subscribers.We preach the key to trading OTC stocks is finding momentum BEFORE it happens and then be patient. Now, when we say that we find momentum BEFORE it happens, we are investors looking to position our subscribers BEFORE the move happens.We got our subscribers in early on HMBL, which you can read our first article here, and ALPP, which you can read about here. This is where the big money is made and why so many of our subscribers are sitting on gains of over 5620% in ALPP and over 13,270% in HMBL!!We always alert our subscribers first before we publish for our regular readers. This is the value of having a subscription to Insider Financial, which you can sign up for here. We alert our subscribers with our best ideas before our regular readers.[embed]https://www.youtube.com/watch?v=uAucR0LzI10[/embed]

EEENF

In November 2014, 88 Energy entered into a binding agreement with Burgundy Xploration (BEX) to acquire a significant working interest in a large acreage position on a multiple objective, liquids-rich exploration opportunity onshore Alaska, North America – Project Icewine.Subsequently, the gross acreage position has expanded to ~480,000 contiguous acres (~310,000 acres net to the Company).The Project is located on an all-year operational access road with both conventional and unconventional oil potential. The primary term for the State leases is 10 years with no mandatory relinquishment and a low 16.5% royalty.[embed]https://www.youtube.com/watch?v=m3uV0oTEON0&feature=emb_title[/embed]

Merlin-1

The Merlin-1 well was spud last month and is targeting 645 million barrels of gross mean prospective resource. Wireline logging at Merlin-1 will commence shortly. A second well, Harrier-1, is planned to be drilled in 2022 and is targeting gross mean prospective resource of 417 million barrels.Each of the Merlin and Harrier prospects is located on trend to an existing discovery, in the same play type (Nanushuk topsets). This has de-risked the prospects considerably and resulted in a relatively high independently estimated geologic chance of success.So far, preliminary results are coming in better than anticipated. An independent geologist said the find could be significant because it would show that an oil-bearing regional geologic formation, where discoveries have previously been made, is larger than thought.

Managing Director, Dave Wall, commented: “Whilst there is still work to do to confirm a discovery, the results to date are encouraging and we look forward to providing an additional update on the wireline program in 7 to 10 days.”

88 Energy found oil at multiple intervals in Merlin-1 but a significant oil column was detected in a target zone in the Nanushuk, a geologic formation extending across the eastern NPR-A where other companies have made discoveries.Two of those discoveries are now in development planning, ConocoPhillips' "Willow" discovery north of the Merlin well and Pikka, a find on state lands east of the NPR-A that is being developed by New Guinea-based Oil Search, are both in the Nanushuk and are targeted for production expected by 2026.ConocoPhillips and Oil Search say their discoveries are now estimated to hold several hundred million barrels of recoverable oil. ConocoPhillips has also made a discovery at "West Willow," a few miles west of Willow, and an apparent find at "Harpoon," a few miles to the southwest.

Umiat Field

88 Energy has also satisfied conditions to complete its acquisition of the Umiat field, a historic oil discovery made in 1945 by the US Navy that is adjacent to leases held where the Merlin well was drilled.Eleven appraisal wells were drilled by the Navy and a private company, but Umiat was never commercially developed. 88 Energy cemented and plugged old wells to satisfy US Bureau of Land Management terms when it acquired two federal leases at Umiat covering 17,633 acres.Umiat-5 flowed 268 barrels per day on a 3-month test and Umiat-8 had a peak flow rate of 5.9mmcf/d of natural gas during a 4-day test. Little work was done until 2013/2014 when Linc Energy drilled two wells, Umiat-18 and Umiat-23H. Umiat-23H was tested with a maximum flow rate of 800 barrels per day and sustained flow of 200 barrels per day.

EEENF Valuation

The company’s current cash position stands at US$13m which it said more than funds its share of the drilling of Merlin-1 as well as its other planned activities.Besides having the cash to fund its share of drilling Merlin-1, EEENF has an impressive shareholder list with the top 20 shareholders controlling 36% of the company. There's a lot of smart money betting on EEENF.There is some confusion as to what the current share structure is for OTC investors.View on Twitter/XThe main listing for 88 Energy is on the ASX and they have the current market cap as AUD$914 million, or US$695 million. This would mean that there are approximately 10 billion shares outstanding.In doing simple back of the napkin math, 1 billion barrels of oil at $60 is $60 billion. On 10 billion shares outstanding, that would give EEENF a share price of $6.But even if the company's estimates are way off (we see no reason why they are) and there's only 100 million barrels in the ground (10% of what the company estimates), and you're looking at a share price of $.60 for EEENF.

Bottom Line

After crossing a nickel, we see EEENF climbing above a dime, then a quarter, and finally dollars as more drilling results hit the tape.We see EEENF as being valued at $.60 on the low-end and as high as $6 if you just go by management's estimates. Independent geologists have said that management has been conservative with its estimates and you could be looking at a share price north of $10 for EEENF.All we can say is that EEENF is one of the best bets for investors on the OTC Markets. Where else can you pick up a stock that is worth dollars for a nickel? EEENF looks to be the ultimate no-brainer on the OTC Markets. EEENF could easily be the OTC stock of 2021, just like HMBL was in 2020.As always, good luck to all (except the shorts)!

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Disclosure: We have no position in any of the securities mentioned. We wrote this article ourselves and it expresses our own opinions. We are not receiving compensation for it. We have no business relationship with any company whose stock is mentioned in this article. Insider Financial is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This article is not a solicitation or recommendation to buy, sell, or hold securities. This article is meant for informational and educational purposes only and does not provide investment advice.Image by Terry McGraw from Pixabay