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    REG - 88 Energy Limited - Quarterly Report and Appendix 5B

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RNS Number : 9262R  88 Energy Limited  22 July 2025

22 July 2025

 

QUARTERLY ACTIVITIES REPORT

For the quarter ended 30 June 2025

 

 

88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy, 88E or the
Company) provides the following summary of activities for the quarter ended 30
June 2025.

Highlights

Project Leonis Alaska (100% WI)

A Multi-Reservoir Opportunity of Scale:

(Ø ) Combined internal gross mean Prospective Resource estimate across the
Canning and USB Prospects of 798 MMbbls (664 MMbbls net mean to 88E) 1 
(#_ftn1)  2  (#_ftn2)

(Ø ) Combined net unrisked Resource range:

(·         ) 1U (low) of 303 MMbbls(1,2)

(·         ) 2U (best) of 597 MMbbls(1,2)

(·         ) 3U (high) of 1,140 MMbbls(1,2)

Future Potential Tiri-1 Exploration Well:

Ø Planning and permitting progressed for the proposed Tiri-1 exploration
well, targeting both the Canning and USB Prospects, with potential deeper
reservoir upside.

Ø Key vendors submitted operational proposals, contributing to updated well
AFE.

Ø 88 Energy's 100% working interest positions the Company favourably to
secure a material carry through its active farm-out process. Third party
evaluation remains ongoing.

Ø Formal award of the four (4) additional leases totalling ~10k acres was
received.

Ø Acquisition of the low-cost Great Bear 3D seismic survey (2014) completed,
significantly expanding the regional 3D dataset. The new data overlaps the
both the existing Leonis acerage and the Storms and Franklin Bluffs 3D data
sets, enhancing prospect evaluation.

Project Phoenix Alaska (~75% WI)

Farm-Out Activity and Work Program Progress:

Ø Joint venture partner Burgundy Xploration LLC (Burgundy) advanced it's
funding strategy to finance Phase 1 of the farmout, targeting US$29M (A$45M)
to drill a horizontal well and conduct a long term production test 3  (#_ftn3)
.

Ø Burgundy reaffirmed its commitment by meeting its 2025 financial
obligations, including 100% of lease cost payments in accordance with the
farm-out agreement.

Ø Ongoing optimisation of the planned stimulation and extended horizontal
flow test at the Franklin Bluffs gravel pad, with spud currently targeted for
Q2/Q3 CY2026 4  (#_ftn4) .

PEL93 Namibia (20% WI)

Licence Extension and Pre-Drill De-Risking Underway

Ø License extension secured: The Namibian Ministry of Mines and Energy
granted a 12-month extension to the PEL 93 First Renewal Exploration Period,
now expiring on 2 October 2026.

Ø Stage 1 Work Program approved: A new work program has been introduced under
a revised Farmout Agreement with Operator Monitor Exploration Limited,
designed to support pre-drill de-risking ahead of a potential Stage 2 drilling
campaign.

Ø Airborne gravity survey set for H2 CY25: A high-resolution gravity survey
will cover the southern area of PEL 93, where multiple structural leads have
been identified.

Ø Lead 9 Prioritised as a key target: A ~100km(2) anticlinal structure, Lead
9, was mapped from  2024 2D seismic data, with closure at all potential
reservoir and source rock levels. Additional leads also emerged within the
gravity survey area.

Ø Regional catalysts building: ReconAfrica is preparing to spud the Kavango
West 1X exploration well in July 2025, which has striking similarities to Lead
9 located in the southern area of PEL 93.

·

Project Longhorn Texas (~65% WI)

Strategic Divestment Progressing:

Ø Q2 CY25 production averaged 309 BOE/day gross (~76% oil), down from 342 BOE
per day in Q1 CY25, due to 30 days of third party gas facility downtime
requiring gas venting and additional subsequent days of high line pressure as
well as unscheduled maintenance on various wells.

Ø The Company has progressed negotiations with a third party regarding a sale
of the asset. The divestment remains subject to final legal documentation and
requisite internal and external approvals.

Corporate

·     Cash balance of A$8.05 million at 30 June 2025.

·     Strong treasury position supports planning for the Tiri-1 and new
venture opportunities.

·      Capital (Share) consolidation completed on a 1-for-25 basis, as
approved by shareholders on 6 May 2025.

·      Small Holding Share Sale Facility launched for share holders with
parcels valued under A$500, to streamline registry management and reduce
overheads.

Project Leonis (100% WI)

Multi-reservoir opportunity further enhanced with four new lease blocks
awarded and the Canning Formation added as a new reservoir target.

Canning Formation (Canning):

·      Prospective Resource target of 283 MMbbls of oil (net mean);
unrisked net 3U (high) 469 MMbbls, 2U (best) 259 MMbbls, and 1U (low) 136
MMbbls (1 2).

·      Identifed following reprocessed and interpreted Storms 3D seismic
data, and a quantitative interpretation study (rock physics, AVO and seismic
inversion).

Upper Schrader Bluff (USB):

·      Prospective Resource target of 381 MMbbls of oil (net mean);
unrisked net 3U (high) 671 MMbbls, 2U (best) 338 MMbbls, and 1U (low) 167
MMbbls 5  (#_ftn5) .

·      The USB formation is the same proven producing zone as found in
nearby Polaris, Orion and West Sak oil fields to the north-west

Project Leonis: Forward Program

 Project Leonis key milestones
 Indicative Project Leonis timeline*                                     H1-24           H2-24           H1-25           H2-25           H1-26           H2-26
 Maiden Prospective Resource Report - USB reservoir                      P
 Completion of QI study, mapping of Canning prospect & lease bid                         P
 Maiden Prospective Resource Report - Canning Formation                                                  P
 Planning/permitting/design for proposed Tiri-1 well                                                     n               n
 Targeted farmout to attract potential partners                                                          n               n
 Tiri-1 exploration well                                                                                                                 n               n
 *This timeline is indicative and subject to change. The Company reserves the
 right to alter this timetable at any time

 

Planning and permitting for the Tiri-1 exploration well continued during the
quarter, with key Alaska North Slope vendors submitting operational proposals
refining the authorisation for expenditure (AFE). The optimal Tiri-1 well
location is designed to intersect the Canning and USB reservoirs and to test
deeper potential upside. The final well location will be subject to agreement
with potential farminees.

88 Energy's 100% working interest provides a strong position from which to
secure a large, proportionate carry upon completion of the active farm-out
process, ahead of any drilling event. Third party assessment of the
opportunity was ongoing at quarter end. Drilling the Tiri-1 well is subject to
the completion of a farm-out, with the Company not intending to conduct a
capital raising to finance the well.

88E recently acquired the low-cost Great Bear Survey 3D survey, completed in
2014, which extends the Company's regional 3D seismic database. The dataset
overlaps the Storms 3D and Franklin Bluffs 3D datasets, providing an enhanced
regional seismic framework from which to assess new opportunities.  The new
3D dataset also overlaps the existing Leonis acreage position.

Project Phoenix (~75% WI)

Joint Venture Partner Farm-Out Review

On 17 February 2025, 88 Energy announced it had entered binding terms for a
Farmout Participation Agreement (PA) with Burgundy Xploration LLC (Burgundy)
in relation to Project Phoenix. Under the agreement, 88 Energy's wholly owned
subsidiary, Accumulate Energy Alaska, Inc. (Accumulate), will be fully carried
for all costs associated with the planned horizontal well program, including
an extended flow test currently scheduled for mid-2026.

Transaction highlights:

·      Burgundy to fully fund up to US$39 million (approx. A$60 million)
of Project Phoenix's total gross future work program costs in exchange for up
to an additional 50% Working Interest (WI) in Project Phoenix from 88 Energy.

·      Provides a clear funding avenue to advance Project Phoenix
towards a final development decision via a two-phase farm-in arrangement:

Ø Phase 1: Burgundy to fund US$29 million (approx. A$45 million) for CY25/26
work program, including drilling of a horizontal well and production testing
scheduled for H1 CY26 (88E fully carried, Accumulate WI post Phase 1 farmout
35%)

Ø Phase 2: Upon Phase 1 Success; Burgundy to fund up to US$10 million
(approx. A$15 million) for an additional well or other CAPEX program (88E
carry up to US$7.5 million, based on the current 75%, with Accumulate WI post
Phase 2 farmout to 25%).

 

88 Energy continued to work with Burgundy to advance planning and permitting
for the horizontal test well and flowback operation scheduled for mid-CY26 and
Burgundy is progressing well towards its North American public listing.
Burgundy continued to reaffirm its project commitment by paying 2025 cash
calls during the quarter, including 100% of lease payments, which form part of
its carried expenditure under the farm-out agreement.

Project Phoenix: Forward Program

 Project Phoenix key milestones
 Indicative Project Phoenix timeline*                                    H1-24           H2-24           H1-25           H2-25           H1-26           H2-26
 Successful Hickory-1 flow test flows light crude oil to surface         P
 Post-well analysis and updated Contingent Resource Estimate                             P
 Targeted farmout to de-risk and provide pathway to production test                                      P
 Planning/permitting/design for proposed horizontal well                                                 n               n               n
 Extended horizontal production test**                                                                                                   n               n
 *This timeline is indicative and subject to change. The Company reserves the
 right to alter this timetable at any time.

 **Horizontal production test subject to Burgundy funding / 2025 public
 listing, as well as government and other approvals.

Namibia PEL 93 (20% WI)

License Extension Secured from Namibian Government

The Ministry of Mines and Energy of the Republic of Namibia formally approved
a 12-month extension to the First Renewal Exploration Period for PEL 93 during
the quarter. The extension moves the current expiry date from 2nd October 2025
to 2nd October 2026 and the following work commitments are to be completed
during the extension period:

·      Acquisition of an airborne gravity and magnetic survey;

·      Integration of datasets to support drilling location selection;

·      Completion of an Environmental Impact Assessment (EIA) for
drilling; and

·      A minimum gross spend of US$800,000.

New Stage 1A Work Program Approved

In conjunction with the license extension, 88 Energy and Monitor have executed
a variation to the existing Farmout Agreement. The amendment introduces a
Stage 1A Work Program, comprising:

·      A high-resolution airborne gravity, magnetic, and radiometric
survey;

·      Preparation of a certified prospective resource report;

·      Identification of potential drilling locations; and

·      Creation of an Authority for Expenditure (AFE) for any proposed
future well.

Stage 1A will be jointly funded on a 50:50 basis by 88 Energy and Monitor,
subject to a cost threshold of US$1 million, unless otherwise agreed.

PEL 93 Forward Work Program

 PEL 93 key milestones
 Indicative PEL 93 timeline(*)                                 H1-24           H2-24           H1-25           H2-25           H1-26           H2-26
 Working Interest assigned to 88E                              P
 Completion of ~200km 2D acquisition and proceessing                           P
 Airborne Gravity and Magnetic survey                                                                          n
 Maiden Certified Prospective Resource Report                                                                                  n
 Planning/permitting/design for potential exploration well                                                                     n               n
 *This timeline is indicative and subject to change. The Company reserves the
 right to alter this timetable at any time

 

The joint venture is preparing to commence the airborne gravity survey in H2
2025, focusing on the southern portion of the license area in the heart of the
Owambo Basin. This follows identification of Lead 9, a very large anticlinal
structure, during the H2 2024 2D seismic program. Lead 9 is analogous to the
structure to be drilled by ReconAfrica's imminent Kavango West 1X well. Both
both structures exhibit large, robust structural closures incorporating
shallow clastic reservoirs, the deeper Otavi carbonate reservoir (seen in
Naingopo-1) and the deeper source rocks. According to the Operator, Monitor,
the regional structural model suggests the presence of a series of similar
features extending across the southern Owambo Basin. Early gravity and
radiometric data suggest even larger structural leads may be present in
southeast of the block.

Regional Catalysts Building: ReconAfrica's Kavango West 1X Well

88 Energy notes the upcoming drilling of the Kavango West 1X exploration well
by ReconAfrica in the adjacent Damara Fold Belt. This well will target a large
fold structure approximately 20 km long and 5 km wide, anticipated to
penetrate a thick Otavi carbonate reservoir with mature source rocks within
the same closure. Rig mobilisation is scheduled for mid-2025, with drilling
expected to commence shortly thereafter. This regional activity highlights
growing industry interest in the broader Owambo Basin.

Project Longhorn (~65% WI)

Q2 CY25 production averaged 309 BOE/day gross (~76% oil), down from 342 BOE
per day in Q1 CY25, due to 30 days of third party gas facility downtime
requiring gas venting and additional subsequent days of high line pressure as
well as unscheduled maintenance on various wells.

As noted in Q1 2025, following an internal review of Project Longhorn's
alignment with the Company's long-term strategy and asset mix, a decision was
taken to explore the potential divestment of interests in the asset. The
review considered capital expenditure requirements to offset production
declines and increasing cost profile associated with the ageing existing
wells.

The Company advanced discussions with interested parties during the quarter,
and following due diligence reviews, offers were submitted to the Company for
the full working interest in Project Longhorn. The divestment of the asset
remains subject to completion of customary legal documentation, as well as
relevant internal and external approvals.

Corporate

At 30 June 2025, the Company's cash balance was A$8.05 million. The attached
ASX Appendix 5B sets out the Company's cash flow for the quarter.

Material cash flows for the period include:

·      Exploration and Evaluation Expenditure: A$0.7 million (March 2025
quarter A$0.9 million) related to Leonis Tiri-1 permitting and planning and
PEL 93 2025 work program costs.

·       Staff and Administration Costs: A$1.3 million (March 2025
quarter A$0.9 million) reflecting one-off annual insurance renewal, year-end
audit and tax and market compliance including AGM and share consolidation, and
includes fees paid to Directors and consulting fees paid to Directors of
A$0.35 million.

The Company held its AGM on 6 May 2025 with four (4) of five (5) resolutions
being carried. The approval of Resolution 3 - Approval of 7.1A Mandate was not
carried.

The Company completed the consolidation of capital on a one (1) share for
every twenty-five (25) shares held basis as approved by shareholders on 6 May
2025.

Subsequently, on 16 June 2025, the Company announced the establishment of a
Small Holding Share Sale Facility for holders of "less then marketable parcels
(
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