REG - 88 Energy Limited - Highly Prospective New Leases in Alaska

88 EnergyAnnouncement

12/12/2024 07:45

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RNS Number : 8403P  88 Energy Limited  12 December 2024

This announcement contains inside information

88 Energy Limited

Highly Prospective New Leases in Alaska

88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or the Company) is
pleased to announce that its wholly owned subsidiary, Captivate Energy Alaska,
Inc. has been declared the highest bidder on four (4) lease blocks immediately
adjacent to the existing Project Leonis leases (refer to Figures 1 and 2). The
new lease blocks cover approximately 10,203 acres, expanding Project Leonis'
footprint to a total of fourteen (14) leases covering approximately 35,634
contiguous acres.

Project Leonis Investment Highlights

·   New leases were strategically targeted following the identification of
additional prospectivity within Canning Formation turbidites.

·   Addition of the new blocks substantially expands the Company's acreage
position at Project Leonis creating a multi-zone exploration opportunity of
considerable scale.

·   Newly identified Canning prospect indicates significant resource
potential, with an approximate areal extent of 43km(2) and a thick reservoir
succession of up to 336 feet.

·   Quantitative interpretation (rock physics, AVO and seismic inversion)
of the previously identified Upper Shrader Bluff (USB) and Canning Formation
(Canning) prospects is in the progress of being finalised.

·   Selection of potential drilling locations will occur in early 2025,
leveraging results from the quantitative interpretation study, ahead of a
planned well anticipated in 1H'26.

·   Project Leonis is emerging as a highly attractive exploration
opportunity which is located adjacent to TAPS and the Dalton Highway,
significantly enhancing the future development and commercialisation
potential.

Managing Director, Ashley Gilbert, commented:

"The award of these new blocks meaningfully expands Project Leonis' acreage
position and reinforces our ongoing commitment to exploration on Alaska's
North Slope. The new leases were targeted following identification of
additional prospectivity within the Canning Formation, transforming Project
Leonis into a multi-zone exploration opportunity of considerable scale.

Our enhanced position benefits from access to data from historical wells that
indicated oil shows and calculated pay in both the USB reservoir as well as
the recently mapped Canning Formation reservoir accompanied by the existing
Storms 3D data suite. We are extremely pleased to have secured this additional
acreage and look forward to further de-risking the opportunity through
continuing analysis ahead of selecting an optimal drilling location to access
both reservoirs. The Company is targeting a partial farm-down before any
future potential drill event currently targeted for 1H 2026."

 

Project Leonis: Addition of Four New Targeted Leases

88 Energy (via its wholly owned subsidiary, Captivate Energy Alaska, Inc) has
been announced as the highest bidder on four additional leases, covering
approximately 10,203 acres immediately adjacent to the existing Project Leonis
leases. The leases are subject to adjudication and regulatory approvals in
advance of formal award, expected in 1H 2025. The lease blocks were
specifically targeted due to additional prospectivity identified and mapped
within the deeper Canning Formation reservoir interval.

Additional Prospectivity Identified
Reprocessing and interpretation of the Storms 3D seismic data identified a significant geological feature attributed to basin-wide erosion during the Mid Campanian. The erosional event led to canyon-like scours within the Hue shale providing prominent accommodation space for the subsequent deposition of high-energy Canning Formation toe-of-slope turbidite sequences. These turbidites, which form a thick reservoir succession of up to 336 feet and have an aerial extent of 43km(2), indicate a prospect of considerable scale.
 Figure 1: New Project Leonis blocks identified in red with Canning Formation
 prospect overlayed.

 

Notably, this feature is yet to be penetrated by offset wells in the immediate
vicinity. However, oil shows, ("oil over shakers") and calculated pay was
observed at the chronostratigraphic equivalent sequence in Hemi Springs Unit 3
well (Figure 3). The corresponding Canning Interval in Hemi Springs Unit 3 has
porosities of up to 28%, with the reservoir within the canyon-like feature
anticipated to be greater. Analogous to the Tiri prospect, high net-to-gross
turbidites are being produced from Hue Shale scours in Conoco Phillips'
Tabasco field, just 23 miles to the north-west. Encouragingly, the Tabasco
field outline bears a remarkable resemblance to the Canning prospect at
Leonis.

 

A comprehensive Quantitative Interpretation (QI) study commenced in Q3 2024 to leverage the reprocessed Storms 3D seismic data. The primary objective of the study is to identify anomalous responses within the Canning feature, while the secondary aim is to pinpoint "sweet spots" within the Upper Schrader Bluff (Tiri Prospect). Results from AVO and inversion analysis are expected in early Q1 2025.

Figure 2: Conoco Phillips' Tabasco field, just 23 miles to the north-west of Project Leonis.

Recognising the Canning Formation's potential, 88 Energy submitted bids for four additional blocks. These blocks also contain further prospectivity within the USB formation, currently not included in the existing Tiri Prospective Resource estimate of 381 MMbbls(1,2) of oil (net mean, unrisked) for Project Leonis.  With the addition of the Canning prospect, 88 Energy believe that Project Leonis is a compelling farm-in opportunity.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Figure 3: Seismic cross-section highlighting new Canning Formation reservoir
and noted live oil over shakers at corresponding interval within this
formation at the Hemi-Springs #3 well log.

 

 

An Expanded Multi-zone Opportunity of Significant Magnitude

Post formal award expected in 1H 2025, Project Leonis will comprise 14 leases,
totalling 35,634 contiguous acres, expanding 88 Energy's position in this
highly prospective region. The USB reservoir provides an attractive appraisal
drilling opportunity targeting a Prospective Resource of 381 MMbbls of oil
(net mean, unrisked). The addition of the Canning Formation as a secondary
reservoir further enhances Project Leonis' multi-zone drilling potential.

Volumetric analysis of the Canning Formation reservoir is underway and is
anticipated to rival the USB prospective resources in magnitude. In parallel,
AVO analysis for both the USB and Canning intervals continues, aiming to
identify sweet spots and refine drilling locations for a potential exploration
well in 1H 2026.

Historical data reinforces the prospectivity of Project Leonis. The Hemi
Springs Unit 3 well (drilled in 1985) targeted deeper reservoirs without the
benefit of modern seismic data, leading to overlooked low-resistivity oil pay.
Re-evaluation of petrophysical data has since identified net oil pay within
both the USB and Canning Formation. Oil shows from the Hemi Springs Unit 3
well correlate with extensive areal mapped potential.

Modern advances in understanding low-resistivity pay have unlocked substantial
reserves across Alaska's North Slope, exemplified by the Willow and Pikka
fields. Similarly, 88 Energy's re-evaluation of legacy wells led to the
successful drilling and testing of Hickory-1 in CY23-24. Our approach to
Project Leonis follows this proven strategy.

Project Leonis is strategically positioned for efficient development, located
near existing infrastructure including export pipelines and major service
hubs.

 

 

 

Figure 4: 88 Energy acreage position on the North Slope, Alaska showing the
position of Project Leonis' expanded acreage position including the 4 new
blocks.

 

Project Leonis: Advancement Strategy

88 Energy has engaged Fairweather to initiate planning and permitting for the
Tiri-1 exploration well, which will target the USB and Canning reservoir zones
at an optimal location within Project Leonis. Drilling remains contingent on
securing a farm-out partner, with Llamas and Bannister Energy Advisors Ltd
(LAB) in London recently appointed to manage a relaunched and expanded active
farm-out process to attract new potential partners to the project.

Analysis utilising the Storms 3D seismic data continues, focusing on refining
exploration targets and identifying an optimal drilling location. The USB
reservoir's mapped amplitude anomalies and fault-bound trapping mechanism
highlight its robust technical case. Similarly, ongoing analysis of the
Canning Formation will enhance the overall understanding of the acreage's
potential.

The expansion of Project Leonis' acreage position and the addition of the
Canning Formation reservoir opportunity are significant for 88 Energy. This
multi-zone opportunity presents a compelling case for future exploration and
potential development. Guided by modern seismic re-evaluation and aided by a
strategic location. Project Leonis is firmly positioned as a key asset in 88
Energy's portfolio.

 

Figure 5: Hemi Springs Unit-3 well gravel pad and well head, March 2024. A
potential location for the drilling of the Tiri-1 well.

 

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: + 44 131 220 6939

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 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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