The company has de-risked its Icewine project in Alaska and is benefiting from counter-cyclical money jumping on board.
Its Australian Securities Exchange stock went from $18 million on January 31 to $127 million on February 29, which managing director Dave Wall put down to the fact the company had been able to achieve many milestones - including getting its hands on Icewine in the first place - because of the low oil price.
The fact Brent crude rose by 5.2% in February to close at $US36.3 per barrel would have helped 88E's cause. That jump came on news Saudi Arabia and Russia had agreed to freeze oil output at January 2016 levels.
However, the market had serious doubts about the legitimacy or effectiveness of that deal given OPEC was oversupplying the market by about 2 million barrels per day as it was.
Still, Deloitte said the move by the world's two largest producers was "a big step forward", being the first significant cooperation between and non-OPEC producers in 15 years.
Speaking to Energy News from Alaska yesterday, Wall said that in de-risking Icewine in the proven, prolific and productive, if rather expensive North Slope petroleum province, results had come in "as good or better than our expectations on everything we've measured so far".
It was all mostly thanks to the West Texas Intermediate's low trend, and positive momentum gained with news such as the positive evaluation update from its Icewine-1 well indicating a wealth of resources consistent with the company's expectations.
Wall said while there had been plenty of competition for the deal to get into the project in 2014, its competitors got cold feet because the oil price was dropping so quickly - $US5 on a daily basis, gifting the Aussie junior the mouth-watering project.
"Had the oil price not been low we wouldn't have got access to a rig to drill the well in the timespan that we did, and we were also able to get permitting done quickly because they didn't have a massive queue like they normally do in Alaska," he said.
"When we went to the leaser last November we had no competition, even though we were drilling a well that could potentially unlock several billion barrels of recoverable resource.
"So we were able to pick up another 174,000 acres and triple our leverage into the project, at a time when everyone else was not being as proactive as we were."
While 88E is taking on a lot of risk by undertaking those activities, the flipside to the risk coin is reward - so success that comes with de-risking something with such a large upside, such as Icewine, is rewarded by shareholders.
Hence the company's stellar performance in February.
"As fewer juniors are doing any work, there's a smaller pool of money out there, which is counter-cyclical money that will try to pick up bargains in unloved sectors, and if you're the only one doing anything and having some success have a better chance of attracting that money," Wall said.
The momentum 88E has gained with investors also helps its liquidity, which has been astronomical of late.
"Our liquidity over the past month has been pretty amazing," Wall said.
"When you have that, it doesn't just attract the counter-cyclical money, it attracts momentum investors and all sorts of other people.
"Fortunately we've managed to get some decent press, which has raised the profile. All the money we've raised in the past has been from sophisticated investors and some small institutions, and we did a share purchase plan to look after all those guys who missed out on those placements at the end of last year."
Wall has also witnessed a fairly hefty migration of its trading towards London's Alternative Investment Market, where it is also listed.
"In the UK everyone sits behind nominees, and now we've got about 65% of our stock on AIM, so there has been a bit of migration over there, partly because there was a big arbitrage between the Aussie and London share prices," he said.
"So if I'm a market maker on AIM I can buy the stock in Australia for, say it was A3c a few weeks ago, and I could sell it on AIM for the equivalent of 3.5c.
"And if you've got big liquidity already they those guys come in and they trade additional liquidity."
As for WTI, the former analyst believes long-term structures are intact, albeit some typical manipulation by OPEC which is nothing new in the cartel's 56-year history.
"People say demand is weak but it still continues to grow," Wall said.
"It's just that the supply onset from US shale has upset the dynamic and has forced OPEC's hand to produce barrels that they normally would've kept in reserve.
"So OPEC is producing about 3MMbbl more than they usually do, which means they price of oil has always been an artificial price that's always been contrived, which is no different now to when the formation of OPEC."
