REG - 88 Energy Limited - Year-End Shareholder Update

88 EnergyAnnouncement

20/12/2023 07:15

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RNS Number : 4399X  88 Energy Limited  20 December 2023

20 December 2023

88 Energy Limited

Year-End Shareholder Update

88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) ("88 Energy" or the "Company")
is pleased to provide shareholders with a summary of its portfolio of
projects.

88 Energy is nearing the conclusion of another busy year, having set the
foundation for what is expected will be a very bright 2024.  In the context
of a changing global energy landscape and challenging financial markets, 88
Energy has achieved several key milestones which have led to meaningful growth
in the scale, quality, and diversity of opportunities within of our now global
oil and gas portfolio.  The Company is on a clear path to building a balanced
portfolio of assets spread across the oil and gas life-cycle.

Moving into 2024, shareholders can expect multiple high impact events
providing catalysts for value growth throughout the year.

-     We look forward to reporting the Hickory-1 flow test results in
March 2024, which we anticipate will be the first of 88 Energy's wells to flow
oil to surface.

 

-     Project Leonis will see an independent, Certified Resource Estimate
completed before commencing a formal farm-out program in 1H24 in anticipation
of a well in 2025/26.

 

-     In Namibia, we are excited with the significant potential of our new
acreage position, with the results of the 2D seismic program expected in
2H24.  The objective of the 2D seismic program is validation of the
structural closures interpreted from airborne gravity and magnetic data, the
results of which will be used to obtain a certified Prospective Resource
Estimate and define potential drilling locations. We will closely monitor
results of neighbouring 1Q24 drilling programs in the Owambo basin, which will
in part inform the future potential of the basin.

 

-     At Project Longhorn, we have expanded our acreage and the number of
cost-effective work-over opportunities. In 2024 we are targeting a five well
work-over program set to increase production and cash flows over the course of
the year.

ALASKAN EXPLORATION - A YEAR OF SIGNIFICANT PROGRESS

The Company's activities on the Alaskan North Slope were underpinned by the
successful Hickory-1 exploration well, which is currently cased and suspended
ahead of the flow test commencing in February 2024.  The Hickory-1 well was
designed to appraise up to six conventional reservoir targets with
multi-million barrel oil potential(1,2,3).

Results from the Hickory-1 drilling and logging program were positive, with
oil shows and net log pay calculated across all primary and secondary
reservoirs.  A new Upper Slope Fan System (Upper SFS) reservoir was also
identified which has not been previously tested by any wells on the Project
Pheonix acreage nor the adjacent Pantheon Resources acreage to the north.
The Upper SFS had the best oil shows across all reservoirs intersected in the
Hickory-1 well and recently completed mapping of the Upper SFS demonstrated a
reservoir zone that is more laterally extensive than previously considered.

We released a certified Independent Contingent Resource estimate for Project
Phoenix of 250 million barrels of oil equivalent(3) from the deepest reservoir
encountered in Hickory-1, the Basin Floor Fan (BFF).  The Contingent Resource
was achieved by demonstrating reservoir continuity through seismic and well
data to nearby third-party wells with successful flow tests in the BFF. The
confirmation of a Contingent Resource at the BFF reservoir level enables the
Hickory-1 well to be classed as a "discovery", but more importantly, bodes
well for the shallower and less thermally mature (more oil prone) Slope Fan
System (SFS) and Shelf Margin Delta (SMD) reservoirs, where we will focus
efforts during the upcoming flow test operations.

The flow test and stimulation program has been carefully designed in
consultation with industry experts, utilising available offset information as
well as the detailed evaluation of Hickory-1 drilling and wireline logging
data.  Permitting for the upcoming flow test is on track and All American
Oilfield's upgraded Rig 111 module has been secured to complete the
activities.  Following completion of the November placement, the flow test
program is fully funded and operations will commence in February 2024.

Further north at our Project Leonis acreage (formally awarded April 2023),
work has progressed at pace, with the reprocessing and interpretation of 3D
seismic as well as a review of regional well data providing additional support
for significant resource potential in the Upper Schrader Bluff (USB). We will
seek an independent, Certified Resource Estimate before commencing a formal
farm-out program in 1H24.  We are very pleased to have already received
in-bound farm-in interest for Project Leonis from multiple parties.  Due
diligence is ongoing with these respected, large oil and gas parties, and
although there is no guarantee the Company will conclude an agreement with
these companies, it provides us with encouragement ahead of a formal farm-out
process.

At Project Peregrine, further exploration and technical analysis built upon
detailed re-processing of historical data, identified the new N12 and N13
prospects in the prolific Nanushuk Formation.  The assessment also indicated
that up to three independent prospects could be assessed from a single ice pad
via a sidetrack from the Harrier-1 well pad, resulting in significantly lower
exploration costs.  We are targeting a farm-out to fund any future
exploration efforts at Project Peregrine, although we expect that clarity and
resolution to the current consultation process concerning future regulations
in the NPRA will be required.

Additionally, further assessment of Project Icewine West produced a clearer
picture of the underlying potential within the reorganised project area.  We
conducted mapping activities which identified a series of SMD prospects, the
majority of which have yet to be drilled.  Following recent exploration
success with the SMD reservoir at Hickory-1, we intend to investigate these
prospects to add to an already extensive Icewine West prospective resource
portfolio.

1 Cautionary Statement: The estimated quantities of petroleum that may be
potentially recovered by the application of a future development project
relate to undiscovered accumulations. These estimates have both an associated
risk of discovery and a risk of development. Further exploration, appraisal
and evaluation are required to determine the existence of a significant
quantity of potentially movable hydrocarbons.

2 Mean unrisked resource - Net Entitlement to 88 Energy. Refer announcement
dated 23 August 2022 for pre-Hickory-1 estimates.

3 Refer announcement dated 6 November 2023 for post-Hickory-1 for post
Hickory-1 drilling resource estimates.

NAMIBIA FRONTIER EXPLORATION - EXPANSION AND DIVERSIFICATION

In November 2023, we 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.  We were particularly attracted to the opportunity, secured on
attractive commercial terms, which provides exposure to a first-class
operating jurisdiction, with a highly competitive petroleum regime.  We
believe that Namibia represents one of the last true frontiers for
multi-billion barrel onshore oil and gas discoveries.

PEL 93 benefits from existing infrastructure situated around the Owambo Basin,
enabling a clear pathway for future potential commercialisation while
retaining superior development optionality.  We look forward to beginning
exploration activities in the coming year, with a schedule aimed at delivering
an initial program of approximately 200 line-kilometres of low-impact 2D
seismic.  This will enable validation of ten significant structural closures
in a well-defined sedimentary basin with proven oil charge, reservoirs, and
seals.

PROJECT LONGHORN - EXPANSION OF ACREAGE AND PRODUCTION POTENTIAL

Our ongoing exploration activities have been supplemented by operations at
Project Longhorn.  Oil has flown steadily from our producing wells across the
Texas Basin over the past year, with a combined gross total of 136,000 BOE
(~68% oil) production achieved.  As a producing asset, Longhorn is an
important component of our diversified portfolio and we have taken steps to
expand our holdings across this region.

In July 2023, we acquired an additional interest in new leases located four
miles from our existing Longhorn assets at a non-operated ~45% net working
interest.  These leases encompass 399 net acres with net 2P reserves of
1.1MMBO (refer announcement dated 15 December 2023). This month we acquired
~64% net working interest in an additional 1,262 net acres less than one mile
north and one mile south of Project Longhorn. These acquisitions provide
multiple development opportunities and additional production to enhance our
current output of 370 BOE per day.

Longhorn remains a highly promising region with excellent drilling and
work-over opportunities and the increase in our acreage position by 270% over
the year indicates the commitment and value we see in its future.  Subject to
further analysis, we intend to further expand our holdings across the Texas
Basin, in parallel with our other exploration activities in Alaska and
Namibia.

CORPORATE ACTIVITIES

The Company's recently completed capital raising of A$9.9 million (before
costs) ensures 88 Energy is well-placed to progress the aforementioned
opportunities, including the imminent Hickory-1 flow test, on a timetable that
maximises the value of our portfolio.  We are encouraged by Project Phoenix's
JV partner Burgundy Xploration's recent progress on securing funding and their
commitment to Project Phoenix.

In other corporate initiatives, 88 Energy's Board will consider in the new
year whether a share consolidation in 2024 is in the best interests of
shareholders, and if 88 Energy decides to undertake a share consolidation,
shareholders will be able to vote on this at the 2024 AGM.

I would like to thank our new and long-term shareholders for their continued
support. The recent oversubscribed placement was a strong endorsement of the
confidence that our investors place in us, and we intend to deliver on this
faith.

On behalf of 88 Energy's team, I look forward to updating you on further
progress as we continue high-impact exploration of our world-class portfolio.
Have a safe, restful holiday season and a Happy New Year.

Best regards,

Ashley Gilbert

Managing Director, 88 Energy

 

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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