REG - 88 Energy Limited - Alaskan Portfolio Update

88 EnergyAnnouncement

12/10/2023 07:00

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RNS Number : 8451P  88 Energy Limited  12 October 2023

This announcement contains inside information

 

12 October 2023

 

88 Energy Limited

ALASKAN PORTFOLIO UPDATE

88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or the Company)
provides an update on key activities in progress across its multiple projects
on the Alaskan North Slope.

Highlights

·   Project Phoenix (~75% Working Interest WI)

‒    Rig-111 contracted and long lead orders underway for Hickory-1 well
flow test.

‒    Flow test planning and permitting on schedule and targeted to
commence in early Q1 2024.

‒    Pantheon Resources Plc has declared significant contingent resource
for Lower BFF reservoir on neighbouring acreage.

·   Project Icewine West (~75% WI)

‒    Recent mapping activities on newly identified structures demonstrate
strong potential for delineation of significant further prospective resources.

·   Project Leonis (100% WI)

‒    3rd party mapping validates internal fault interpretation and
reservoir trapping geometries.

‒    Maiden prospective resource estimate for USB reservoir expected by
Q1 2024.

‒    Target to commence farm-out in CY2024 for the potential drilling of
new well in 2025/2026.

·   Project Peregrine (100% WI)

‒    2 newly identified prospects (N12 & N13) recently added to the
independently certified prospective resource at Project Peregrine.

‒    Potential to assess up to 3 independent prospects from a single
Harrier-1 pad via a sidetrack.

‒    Ongoing discussions on potential cost-sharing with near-field
operators in coming years.

·   Broader North Slope activity

‒    Sustained positive Alaskan activity including recent exploration
farm-out's with new investors,  demonstrates continued confidence in the
area.

‒    Oil price increases see Brent increase by ~25% since mid-2023.

 

88 Energy Managing Director, Ashley Gilbert, commented:

"While our focus is firmly on Project Phoenix, including the upcoming flow
testing of Hickory-1 in early Q1 2024, we have also been busy across our
broader Alaskan North Slope portfolio. Building on the Hickory-1 drilling
success, we are re-evaluating the neighbouring Icewine West potential
considering lessons learnt from Hickory-1 and recent near-field results from
other operators. We also continue to advance Project Leonis with a view to
preparing a maiden prospective resource estimate ahead of targeted farm-out
next year and potential drilling of a new well early in the 2025/26 winter
season. These activities have been set against an increasing investor focus on
the North Slope, a continued positive development environment in Alaska, and a
25% increase in the Brent oil price since mid-2023."

Project Phoenix (~75% WI)

The Hickory-1 exploration well is currently cased and suspended ahead of the
planned multi-zone flow test program scheduled for Q1 2024, which is designed
to assess up to 647 million barrels of oil resource(1,2) (pre-drill
estimates).

Design of the flow test and stimulation program, which is targeting multiple
zones, has been undertaken in consultation with industry experts, utilising
available offset well information in combination with a detailed evaluation of
the drilling and wireline logging data from Hickory-1.

As previously announced (refer 88 Energy ASX release dated 21 September 2023),
recently completed mapping of the Upper Slope Fan System (Upper SFS) has
demonstrated a reservoir zone that is more laterally extensive than previously
considered. Resources in this zone have not yet been estimated and are
additional to the pre-drill estimates referred to above.

Figure 1: Mapping of the Upper SFS reservoir correlating to strong shows in
the Icewine-1 well.

 

(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
released to ASX on 23 August 2022. Resources estimated pre-Hickory-1 drilling.

 

Stimulation and flow test modelling for each of the target intervals in
Hickory-1 is now complete. All American Oilfield's upgraded Rig-111 has been
secured for the flow test and ordering of long lead flow test items is
underway. Flow test planning and permitting remains on schedule with
operations set to commence as early as possible in Q1 2024, during the Alaskan
winter operational season.

88 Energy remains very encouraged by the progress of its neighbours to the
north of Project Phoenix, Pantheon Resources (AIM:PANR), who recently
announced a material, independently certified contingent resource for the
Lower Basin Floor Fan (BFF) reservoir. The BFF reservoir was the deepest of
the multiple hydrocarbon-bearing pay zones intersected as part of the
Hickory-1 exploration well.

Project Icewine West (~75% WI)

A recent mapping initiative at Icewine West has identified a series of SMD
(Mid Schrader Bluff) prospects; the majority of which have not yet been
drilled. Given the recent success of the SMD play at Hickory-1, 88 Energy
intends to assess these prospects and add them to the already extensive
prospective resource portfolio at Icewine West. Additionally, like the Project
Phoenix position, 88 Energy interprets Pantheon Resources recently certified
contingent resources at Kodiak, to extend onto the Icewine West acreage and
will have this prospect considered in the upcoming assessment.  The Basin
Floor Fan, mapped across Pantheon's Kodiak field, as well as 88 Energy's
Phoenix and Icewine West Projects, is the same play type as (although slightly
younger than) 88 Energy's Lima Complex and the recent Pantheon contingent
resource certification is extremely positive for future targeted exploration
at Icewine West.

Contingent on a successful flow test at Hickory-1 (Project Phoenix), 88 Energy
is aiming for a follow-up appraisal well at Icewine West in future years.,

 

Figure 2: Annotated seismic section showing up to 6 untested SMD (Mid Schrader
Bluff) prospects at Icewine West.

Project Leonis (100% WI)

As previously announced (refer 88 Energy ASX release dated 27 June 2023),
preliminary interpretation of modern Storms 3D seismic has revealed that the
Upper Schrader Bluff (USB) reservoir penetrated by the Hemi Springs Unit #3
exploration well (drilled by ARCO in 1985) is isolated from other wells in the
vicinity. The USB reservoir is a producing unit to the north-west (including
the West Sak and Polaris fields, amongst others) and was not a zone of
interest for ARCO in 1985.

Figure 3: Initial interpretation of reprocessed 3D Storms 3D data suite and
preliminary USB boundary assessment.

 

Hemi Springs Unit #3 reported "oil over shakers" at multiple depths; it was
later abandoned when deeper, primary targets in the Ivishak Formation were not
consistent with results from drilling activity in  nearby Prudhoe Bay, just
over 5 miles to the north. 88E's ongoing preliminary data examination, using
modern log analysis techniques, has identified over 200 feet of logged,
bypassed net pay in the USB reservoir. Third party mapping has validated the
Company's internal fault interpretation and its assessment of reservoir
trapping geometries.

The Company is currently estimating a maiden prospective resource for Project
Leonis, with this work expected to be completed in Q1 2024.

88 Energy is targeting a farm-out on Project Leonis during CY2024, and may
drill a new exploration well on this acreage as early as the 2025/2026
drilling season. Figure 4 (below) provides a high-level indication of the
forward work program for Project Leonis.

 

Figure 4: Project Leonis lease activity and forward work program.

Project Peregrine (100% WI)

88 Energy released an independent prospective resource update for its Project
Peregrine acreage on the 31(st) July, 2023. The certification resulted in 2
new prospects being identified in the prolific Nanushuk Formation. The
implication of this assessment is that, with a short sidetrack of the proposed
Harrier-1 well, the Company can now assess up to 3 independent prospects from
a single ice pad location. This significantly reduces the footprint and costs
of exploration. 88 Energy is also engaged in multiple ongoing discussions with
near-field operators regarding potential cost-sharing arrangements for Project
Peregrine over the coming years.

The Company remains positive on the prospectivity of the Peregrine acreage and
continues to target the potential re-entry of the Harrier-1 well at some
future point.

Figure 5: Picked seismic section and mapped prospects on Project Peregrine
acreage.

Broader North Slope activity

The Alaskan North Slope continues to be the focus of significant sector
interest, with Santos recently conducting a site visit to its Pikka
development and announcing farm-out of its North Slope exploration acreage to
high-profile strategic investors, APA Corporation (an Apache Company) and
Armstrong Oil & Gas.

88 Energy notes the Biden-Harris Administration's recently announced
cancellation of leases for oil and gas development in Alaska's Arctic Nation
Wildlife Refuge (ANWR). This decision has no impact on 88 Energy's activities
or future plans, with the Company having already relinquished its only ANWR
lease. Further, there is no immediate impact for the Company's NPRA (Federal)
lease holdings, and 88 Energy intends to participate extensively in the
planned feedback process. The Company remains positive on the prospectivity of
the Peregrine acreage and continues to target the potential re-entry of the
Harrier-1 well in the future.

The Alaskan state regulatory and development environment continues to strike
an appropriate balance between environmental protection and effective energy
industry policies. This backdrop is complemented by the rally in global oil
prices over recent months that sees current Brent spot prices increase by ~25%
since mid-2023.

 

 

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

 Cenkos Securities Plc                            Tel: +44 (0)20 7397 8900
 Derrick Lee                                      Tel: +44 (0)131 220 6939
 Pearl Kellie                                     Tel: +44 (0)131 220 9775

 

 

Pursuant to the requirements of the ASX Listing Rules Chapter 5 and the AIM
Rules for Companies, the technical information and resource reporting
contained in this announcement was prepared by, or under the supervision of,
Dr Stephen Staley, who is a Non-Executive Director of the Company. Dr Staley
has more than 40 years' experience in the petroleum industry, is a Fellow of
the Geological Society of London, and a qualified Geologist/Geophysicist who
has sufficient experience that is relevant to the style and nature of the oil
prospects under consideration and to the activities discussed in this
document. Dr Staley has reviewed the information and supporting documentation
referred to in this announcement and considers the resource and reserve
estimates to be fairly represented and consents to its release in the form and
context in which it appears. His academic qualifications and industry
memberships appear on the Company's website and both comply with the criteria
for "Competence" under clause 3.1 of the Valmin Code 2015. Terminology and
standards adopted by the Society of Petroleum Engineers "Petroleum Resources
Management System" have been applied in producing this document.

 

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