REG - 88 Energy Limited - Namibian PEL93 Working Interest Transfer Approved

88 EnergyAnnouncement

22/02/2024 07:00

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RNS Number : 0742E  88 Energy Limited  22 February 2024

This announcement contains inside information

22 February 2024

 

88 Energy Limited

20% WORKING INTEREST SUCCESFULLY TRANSFERRED TO

88 ENERGY FOR STAGE 1 OF FARM-IN TO PEL 93

Highlights

·   20% working interest in PEL 93 successfully transferred (WI Transfer)
to 88 Energy (or the Company) as part of Stage 1 of a three-stage farm-in
agreement (Farm-in Agreement).

·   WI Transfer follows approval by the Namibian Ministry of Mines and
Energy.

·   Stage 1 consideration of US$0.7 million, with a carry of up to US$3.0
million of 2024 work program to include acquisition of ~200 line-km of
low-impact 2D seismic (Seismic).

·   Farm-in Agreement provides entry into PEL 93, a vast 18,500km(2)
onshore acreage position comprising blocks 1717 and 1817 in the Owambo Basin,
Namibia (the Licence).

·   Licence comprises an extensive lead portfolio, with ten significant
independent structural closures identified from a range of geophysical and
geochemical techniques.

·   Considerable potential for more leads to be identified as dataset is
expanded.

·   Seismic acquisition planned for mid-2024 with potential initial
exploration well targeting the Damara play as early as H2 CY2025.

·   Namibia represents one of the last frontier oil and gas jurisdictions
capable of delivering multi-billion barrel discoveries, as evidenced by recent
offshore discoveries.

·   The Company notes further Namibian offshore results in the Nambian
Orange Basin, with GALP Energia confirming the discovery of a "significant
column of light oil in reservoir-bearing sands of high quality", in their
first exploration well (Mopane-1X) in block PEL83.

·   Mopane-1X represents the fifth major oil discovery in under two years
within the Orange Basin and confirms the extension of the petroleum play from
TotalEnergies and Shell's acreage.

 

 

 

88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or the Company) is
pleased to announce the successful WI Transfer by Monitor Exploration Limited
(Monitor) to 88 Energy in relation to Petroleum Exploration Licence 93 (PEL
93), located in the Owambo Basin, Republic of Namibia (Namibia) following
receipt of the approval of the Ministry of Mines and Energy.

 

In November 2023 88 Energy, via its wholly-owned Namibian subsidiary, executed
a three-stage farm-in agreement for up to a 45% non-operated working interest
in the onshore Petroleum Exploration Licence (PEL 93) covering 18,500km(2) of
underexplored ground within the Owambo Basin in Namibia.

Forward work plan

The operator, Monitor, has utilised a range of geophysical and geochemical
techniques to assess and validate the significant potential of the acreage
since award of PEL 93 in 2018. It has identified 10 independent structural
closures from airborne geophysical methods and partly verified these using
existing 2D seismic coverage.

 

Figure 1: Lead inventory showing proposed 2D seismic program. (structural
leads derived from airborne gravity data)

 

Further, ethane concentrations measured in soil samples over interpreted
structural leads validates the existence of an active petroleum system, with
passive seismic anomalies also aligning closely to both interpreted structural
leads and measured alkane molecules (c1-c5) concentrations in soil.

The forward work-program will start with a low impact ~200 line-km 2D seismic
program focusing on confirming the structural closures of the 10 independent
leads identified. The 2D seismic program will be conducted in mid-2024
following a period of planning, public consultation, updating of environmental
compliance requirements and receipt of relevant approvals. Results from the 2D
seismic program will then be incorporated into existing historical exploration
data over the acreage, with results used to identify possible exploration
drilling locations.

An indicative forward work-program is shown below:

 

 

 

The forward work-program is subject to exploration results and relevant
Government and Joint Venture approvals

 

Background; Farm-In Agreement

The Farm-In Agreement was executed on 13(th) November 2023, between Eighty
Eight Energy (Namibia) (Pty) Ltd (88EN), a newly formed, wholly-owned
subsidiary of 88 Energy and private Namibian company, Monitor Oil and Gas
Exploration (Namibia) Pty Ltd (MELN), a wholly-owned subsidiary of Monitor.
Following the WI Transfer, 88EN now holds a 20% working interest in the
Licence, MELN retains a 55% working interest and acts as Operator of the
exploration and development of PEL 93. Private Namibian company, Legend Oil
Namibia (Pty) Ltd (Legend) holds a 15% working interest and and Namibian
government entity National Petroleum Corporation of Namibia (Pty) Ltd (NAMCOR)
holds a 10% working interest in the Licence. Under the terms of the Farm-In
Agreement 88EN is, together with the other three working interest owners,
party to a new Joint Operating Agreement (JoA) in relation to the Licence.

88EN may earn up to a total 45% working interest in PEL 93 by funding its
share of agreed costs under the 2024 work program and budget as defined in the
Farm-In Agreement and any future work program budgets yet to be agreed. The
maximum total investment costs are anticipated to be US$18.7 million.

The current and potential future PEL 93 Joint Venture partners and working
interests are as follows:

 Entity     Pre Farm-in  Stage 1 - Current       Stage 2        Stage 3

                         (Past costs & 2D)       (1(st) Well)   (2(nd) Well)
 Monitor*   75.0%        55.0%                   37.5%          30.0%
 Legend     15.0%        15.0%                   15.0%          15.0%
 NAMCOR     10.0%        10.0%                   10.0%          10.0%
 88 Energy  -            20.0%                   37.5%          45.0%

        *Operator

 

Stage 1 schedule to earn a 20% working interest in the Licence is complete and
comprises:

§ 1(st) instalment: US$0.28 million cash on signing for partial payment of
back costs (Completed);

§ 2(nd) instalment: US$1.25 million to be paid in 88 Energy shares on signing
for part payment of the 2D seismic carry (Completed);

§ 3(rd) instalment: US$1.25 million to be paid in 88 Energy shares upon
approval of the Licence WI Transfer by the Namibian government, as a further
payment in relation to the 2D seismic program carry (Completed); and

§ 4(th) Instalment: US$0.9 million in cash to be paid on or before 1 June
2024 for remaining payment of back costs and 2024 work-program carry.

 

The 2nd instalment payment of US$1.25 million was paid by issuing 322,147,513
new ordinary shares in the Company at a deemed issue price of A$0.006 per
share on 11 December 2023.

The 3(rd) instalment payment of US$1.25 million was paid by issuing
397,947,229 new ordinary shares in the Company at a deemed issue price of
A$0.0048 per share today following receipt of the Namibian government
approval.(1)

Both the second and third instalment shares were issued under Exception 16
(paragraph (b)) under ASX Listing Rule 7.2, with the Company having relied on
Listing Rule 7.1 placement capacity at the time that it entered into the
agreement to issue these shares. Under ASX Listing Rule 7.4 at the General
Meeting held on 15 January 2024, the resolutions were passed for 2(nd) and
3(rd) instalments.

The New Ordinary Shares will rank pari passu with the existing ordinary shares
in the Company with settlement on the ASX today. Application has been made for
the New Ordinary Shares to be admitted to trading on AIM (Admission), with
Admission expected to occur on or around 27 February 2024.

Following the issue of the New Ordinary Shares, the Company will
have 25,123,367,790 ordinary shares on issue, all of which have voting
rights. The figure of 25,123,367,790 ordinary shares may be used by
shareholders as the denominator for the calculations by which they will
determine if they are required to notify their interest in, or change their
interest in, the Company.

 

1.     Working interest approval was dated 19 February 2024 and the 5-day
WVAP per the subscription agreement up to and including the signed approval
date with AU/USD exchange rate on 19 February 2024.

 

This announcement has been authorised by the Board.

 

Media and Investor Relations

 

 88 Energy Ltd

 Ashley Gilbert, Managing Director

 Tel: +61 8 9485 0990

 Email:investor-relations@88energy.com

 Fivemark Partners, Investor and Media Relations

 Michael Vaughan                                  Tel: +61 422 602 720

 EurozHartleys Ltd
 Dale Bryan                                       Tel: + 61 8 9268 2829

 Cavendish Capital Markets Limited                Tel: +44 (0)20 7397 8900
 Derrick Lee                                      Tel: +44 (0)131 220 6939
 Pearl Kellie                                     Tel: +44 (0)131 220 9775

 

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