REG - 88 Energy Limited - Hickory-1 Exploration Well – Rig Contract Executed

88 EnergyAnnouncement

07/12/2022 07:00

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RNS Number : 8298I  88 Energy Limited  07 December 2022

This announcement contains inside information

7 December 2022

 

88 Energy Limited

HICKORY-1 EXPLORATION WELL - RIG CONTRACT EXECUTED

Highlights

·   Rig contract executed for drilling of the Hickory-1 exploration well

·   Permitting and planning remain on track for scheduled spud in
late-February / early-March 2023

·   Hickory-1 designed to appraise six key reservoir targets and 647
million barrels of oil(1,2)

·   Icewine East renamed Project Phoenix to reflect the new focus on proven
oil-bearing conventional reservoirs

·   Project Phoenix unit application open for public comment, closing 31
December 2022

88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or the Company) is
pleased to announce that it has executed a rig contract with Nordic-Calista
LLC (Nordic) for the use of their Rig-2 to drill the Hickory-1 exploration
well on the Alaskan North Slope.

Hickory-1

The Hickory-1 well is designed to appraise six conventional reservoir targets
within the SMD, SFS, BFF and KUP reservoirs and 647 million barrels of
oil(1,2), with spud scheduled for late-February / early-March 2023 to a
permitted total depth of 12,500 feet. The Hickory-1 well has been
significantly de-risked by recent drilling and flow tests carried out on
adjacent acreage by Pantheon Resources, the interpretation of the Icewine-1
well logs, the modern Franklin Bluffs 3D seismic data (FB3D) and AVO analysis.

An optimal drilling location has been selected adjacent to the Dalton Highway
using the above data. This location intersects and will test the substantial
potential oil volumes noted across all mapped play fairways, and in particular
the SMD, SFS and BFF reservoirs.

Significant progress has been made on permitting and planning of Hickory-1 by
our appointed project manager, Fairweather, LLC. All long lead items have been
secured and tendering is nearly complete.  Further details of the drilling
program and schedule will be announced by the Company in the lead up to
planned spud, which remains subject to relevant government and other
approvals.

Project Phoenix

The Icewine East area has been renamed Project Phoenix to reflect the
Company's refreshed exploration strategy for this acreage. Since its
acquisition in 2014, the acreage targeted the unconventional HRZ play. Project
Phoenix is now focused on the proven oil-bearing conventional reservoirs
that were identified during the drilling and logging of Icewine-1 and 2, and
more recently that were flow tested by Pantheon Resources. Project Phoenix is
strategically located on the Dalton Highway with the Trans-Alaska Pipeline
System running through the acreage.

The Company has put forward a unit application covering the Project Phoenix
acreage and received notice from the Alaska Department of Natural Resources
(DNR) that the application is open for public comment until 31 December 2022.
The DNR will consider any comments and issue a decision no later than 1 March
2023. The unit approval will extend the leases for Project Phoenix beyond
their primary term and provides an agreed program to assess commercialisation
of the acreage and a pathway to development and production.

(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

 

About Nordic and Rig-2

Nordic

Nordic Calista, a wholly owned subsidiary of Calista, has been operating
custom build arctic rigs since 1985. Founded in 1972, Calista Corporation
(Calista) is one of the largest of the 13 regional corporations in the state
of Alaska.

( )

Rig-2

Rig-2 is a single module, self-propelled drilling rig. The unique single
module design eliminates extended rig up/down providing significant
efficiencies during the winter exploration season. Rig-2 incorporates a 464k
lbs triple mast with a 600HP AC top-drive.

 

 

This announcement has been authorised by the Board.

Media and Investor Relations

 

 88 Energy Ltd                           admin@88energy.com
 Ashley Gilbert, Managing Director       Tel: +61 8 9485 0990
 Finlay Thomson, Investor Relations      Tel: +44 7976 248 471

 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 Plc
 Neil McDonald                           Tel: +44 (0)131 220 6939 / +44 (0)20 7397 8900
 Derrick Lee
 Pearl Kellie

 

 

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 Set (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 recoverable hydrocarbons.

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