REG - 88 Energy Limited - Formation of Unit Approved Over Project Phoenix

88 EnergyAnnouncement

28/02/2023 07:45

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RNS Number : 3078R  88 Energy Limited  28 February 2023

 

This announcement contains inside information

28 February 2023

 

88 Energy Limited

Formation of Unit Approved Over Project Phoenix Acreage

 

 

88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or the Company) is
pleased to report that the Alaskan Department of Natural Resources (DNR), Oil
and Gas Division, has approved the formation of the Toolik River Unit over the
western and central Project Phoenix lease area.

On 7 December 2022, the Company announced that the Project Phoenix Joint
Venture ("JV") had put forward a Unit application covering leases within the
Project Phoenix acreage area, with the application open for public comment
until 31 December 2022. Following consideration of the Unit application, the
DNR has now confirmed its decision to approve the formation of the Toolik
River Unit covering leases in the western and central area of Project Phoenix
(refer to acreage map at Figure 1). The Unit approval has extended those
leases beyond their primary term, with the Unit Plan of Exploration through to
February 2028.

Unitisation of the leases in the Toolik River Unit provides an efficient,
integrated approach to exploration, delineation, and development of the
numerous identified and potential reservoirs. Accumulate Energy Alaska Inc, a
wholly owned subsidiary of 88 Energy, submitted an Initial Plan of Exploration
on behalf of the JV, for the Toolik River Unit that includes a program of
drilling and non-drilling activities as follows:

·   The non-drilling activities will focus on the Unit Operator conducting
a further review and analysis of the Franklin Bluffs 3D data, including
completion of amplitude-variation-with-offset analysis (AVO analysis) and
simultaneous seismic inversion (SSI or Inversion), to assist in defining
further 'sweet spots' for each play and determine optimal drilling locations
for future exploration and appraisal wells, as well as to further mature the
conventional prospectivity of the Unit acreage.

·   Drilling activities in the Unit consist of drilling the Hickory-1
vertical exploration well during the 2022/2023 winter drilling season and
performing a flow test, subject to well results, during the 2023/2024 season.

·   Subject to success of the Hickory-1 exploration well, the JV will
consider mobilising a rig to the Franklin Bluffs pad and re-entering the
Icewine-1 well, with a view to potentially conducting a short-term production
test or drilling and flow testing a new delineation appraisal well in a
subsequent season.

·   Subject to obtaining positive results from the flow tests and
exploration program, plans also include drilling a horizontal production test
well with an extended flow test program.

·   Subject to successful flow test of Hickory-1 exploration well,
non-drilling activities may also include the acquisition, processing and
interpretation of new 2D seismic over the eastern portion of the Project
Phoenix acreage.

 

The eastern leases in the Project Phoenix acreage area were not included in
the approved Toolik River Unit area due to limited data to support inclusion.
The DNR therefore approved the application in part (western and central lease
areas are supported by an extensive data suite) and will consider inclusion of
the eastern leases in the Toolik River Unit area following completion of
further work, including potential acquisition of 2D seismic data over the
eastern area.

Importantly, the approval of the Toolik River Unit and plan of exploration
will enable the JV to assess the potential commercialisation of the acreage
and a pathway to development and production.

 

 

Figure 1: Toolik River Unit approved area over the Project Phoenix leases

 

88 Energy Managing Director, Ashley Gilbert, commented:

"We are pleased that the DNR has approved the Toolik River Unit covering the
western and central leases of the Project Phoenix acreage and our plan of
exploration. This is a further demonstration of the strong support that 88
Energy, and the broader industry, enjoys from the State of Alaska."

 

 

 

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

 

 

Finlay Thomson, Investor
Relations
Tel: +44 7976 248471

 

Fivemark Partners, Investor and Media
Relations                      Tel: +61 410 276 744

Andrew Edge / Michael
Vaughan
Tel: +61 422 602 720

 

EurozHartleys Ltd

Dale
Bryan
Tel: + 61 8 9268 2829

 

Cenkos
Securities
Tel: + 44 131 220 6939

Neil McDonald / Derrick Lee

 

 

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 35 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.

About Project Phoenix

Project Phoenix (88E 75.2% WI) is located on the central North Slope of Alaska
and encompasses approximately 82,846 gross acres. It is situated on-trend to
recent discoveries by Pantheon Resources Plc (LSE: PANR) in multiple, newly
successful play types across top, slope and bottom-set sands of the Mid
Schrader Bluff, Canning and Seabee formations. Independent mapping has
demonstrated that these plays extend into the Phoenix acreage.

 

Project Phoenix holds an estimated unrisked conventional total of 647MMbbl of
prospective oil resources (mean unrisked, net to 88E), independently assessed
by Lee Keeling and Associates (LKA) in Q3 2022 (see 88E ASX release dated 23
August 2022). The acreage has been significantly de-risked by the recent
Pantheon drilling and flow tests on their adjacent acreage to the North,
coupled with data from Icewine-1 well logs  (encountered 380 ft of net oil
pay within SMD sands) and a modern 3D seismic data set (FB3D).

Figure 1: Project Phoenix lease area, including mapped play fairways, Franklin
Bluffs 3D area and planned Hickory-1 well location (subject to permitting, as
well as JV and Government approvals).

 

 Phoenix: Alaska North Slope            Unrisked Net Entitlement to 88E (1,6) Prospective Oil Resources (MMstb) (4,5)
 Prospects (Probabilistic Method)       Low (1U)          Best (2U)         High (3U)         Mean              COS(3)
 Shelf Margin Delta (SMD A, B & C)      44                140               326               145               81%
 Slope Fan System (SFS)                 24                84                217               89                50%
 Basin Floor Fan (BFF)                  75                341               930               358               50%
 Kuparuk (KUP)                          24                56                98                56                72%
 Prospects Total                         167                621              1,570                647 (2)

 

1.    88 Energy net resources have been calculated using a 75.227% working
interest and a 16.5% royalty.

2.    The unrisked means, which have been arithmetically summed, are not
representative of expected total from the prospects and implies a success case
in all reservoir intervals. 88 Energy cautions that the arithmetically summed
1U estimate may be a conservative estimate and the arithmetically summed 3U
estimate may be optimistic when compared to a statistical aggregation of
probability distributions.

3.    COS represents the geological chance of success as assessed by 88
Energy and reviewed and endorsed by LKA.

4.    Prospects are subject to a phase risk (oil vs gas). Chance of oil has
been assessed as 100% for all targets except for the Kuparuk Formation which
has been assessed as 70%.  Phase risk has not been applied to the unrisked
numbers.

5.    The Prospective Resources have not been adjusted for the chance of
development. Quantifying the chance of development (COD) requires
consideration of both economic and other contingencies, such as legal,
regulatory, market access, political, social license, internal and external
approvals and commitment to project finance and development timing. As many of
these factors are outside the knowledge of LKA they must be used with caution.

6.    Please refer to ASX announcement dated 23 August 2022 for further
details in relation to the prospective resources estimate and associated
risking with Phoenix.

 

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

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