REG - 88 Energy Limited - Project Icewine Resource Update

88 EnergyAnnouncement

10/11/2020 07:10

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20201110:nRSJ8050Ea

RNS Number : 8050E  88 Energy Limited  10 November 2020

10(th) November 2020

 

This announcement contains inside information

 

88 Energy Limited

 

Large Independently Assessed Resource at Project Icewine

 

88 Energy Limited ("88 Energy" or the "Company", ASX:88E, AIM 88E) is pleased
to provide the following update related to its Project Icewine on the North
Slope of Alaska.

 

Highlights

·    Total Prospective Resources of 1.77 billion barrels of oil
equivalent*

·    Substantial oil volume in the Seabee formation - 1.4 billion barrels*

·    Farm-out process for 2022 drilling at Project Icewine to commence
immediately

*Gross mean unrisked prospective resource

 

Detail

Independent Prospective Resources estimates were prepared at Project Icewine
for prospects in the vicinity of the recently drilled Charlie-1 well by ERCE
Equipoise Pte Ltd (ERCE) and are tabulated below. Significantly, the majority
of the resource has been estimated within the Seabee formation, which has been
interpreted as part of one large stratigraphic accumulation over multiple,
potentially connected, sand bodies in the Lima Fan System. Excellent oil
saturations were observed in cores taken from this horizon during the drilling
of Charlie-1. There was no flow test at this horizon in Charlie-1 and,
consequently, reservoir deliverability remains to be established. However,
given the significant size of the estimated resource, 88 Energy is confident
that it will be able to attract a partner to fund drilling of additional wells
to evaluate the flow potential in the Seabee. The Company is also optimistic
about the potential for light oil in the Torok, which could enhance value
substantially.

 

 Prospect (Reservoir)  Expected Phase / (Chance of Phase)(4)  Unrisked Net Entitlement to 88E Prospective Resources (MMboe)(1,2,3)            Geological Chance of Success (COS)  Chance of Development

                                                                                                                                                                                  (COD)(6)
                       1U                                                         2U                  3U                  Mean
 Lima Fan (Seabee)     Oil (100%)                             134.1               612.6               1755.9              888.6               40%                                 30%
 Stellar F1 (Torok)    Oil (60%)                              4.7                 17.0                50.6                25.3                70%                                 30%
 Stellar F3-1 (Torok)  Oil (60%)                              1.9                 6.8                 23.3                11.0                60%                                 30%
 Stellar F4 (Torok)    Oil (60%)                              6.2                 22.1                76.7                36.9                60%                                 30%
 Stellar F5/6 (Torok)  Oil (60%)                              7.2                 27.2                102.0               46.0                20%                                 30%
 Stellar F2 (Torok)    Gas (60%)                              13.2                35.8                83.9                44.1                80%                                 10%
 Stellar F3-2 (Torok)  Gas (60%)                              16.0                46.3                115.7               59.0                80%                                 10%
 Total                                                                                                                    1,110.9(5)

 

1. 88 Energy net resources have been calculated using a 75% working interest
and 16.5% royalty

2. Prospective Resources have been assessed on the basis that they are
unconventional in nature

3. MMboe estimates include condensate but exclude associated gas and assume a
conversion of 6,000scf equivalent to 1bbl

4. Prospects are subject to a phase risk (oil vs gas). ERCE has volumetrically
assessed most likely phase only. Phase risk has not been applied to the
unrisked numbers.

5. The unrisked means, which have been arithmetically summed, are not
representative of the expected total from the prospects and implies a success
case in all reservoir intervals

6. Quantifying the chance of development (COD) requires consideration of both
economic contingencies 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 ERCE they must be used with caution.

 

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.

 

Managing Director of 88 Energy, Dave Wall, stated: "The net potential to 88E
in the Lima Fan System was estimated internally by 88E at around 100 million
barrels prior to the drilling of Charlie-1. With this large independent
upgrade and the recent increase in working interest in the leases, this
potential has now improved to almost 900 million barrels net to 88E - an
outstanding result for our shareholders. Resources of this size are why we are
operating in Alaska and we are on the cusp of drilling at another similarly
sized opportunity at one of our other projects, Project Peregrine."

 

Media and Investor Relations:

 

88 Energy Ltd

Dave Wall, Managing
Director
              Tel: +61 8 9485 0990

Email: admin@88energy.com

 

Finlay Thomson, Investor
Relations
Tel: +44 7976 248471

 

Hartleys Ltd

Dale
Bryan
                             Tel: + 61 8 9268 2829

 

Cenkos
Securities
Tel: + 44 131 220 6939

Neil McDonald/Derrick Lee

 

The attached pdf includes a graphic showing the Lima Fan Complex
- http://www.rns-pdf.londonstockexchange.com/rns/8050E_1-2020-11-10.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/8050E_1-2020-11-10.pdf)

 

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 prospective resource
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.

 

Glossary of Key Terms

 

 1U                              Denotes the unrisked low estimate qualifying as Prospective Resources.
 2U                              Denotes the unrisked best estimate qualifying as Prospective Resources
 3U                              Denotes the unrisked high estimate qualifying as Prospective Resources
 Barrel of Oil Equivalent (BOE)  The term allows for a single value to represent the sum of all the hydrocarbon
                                 products that are forecast as resources. Typically, condensate, oil, bitumen,
                                 and synthetic crude barrels are taken to be equal (1 bbl = 1 BOE). Gas and NGL
                                 quantities are converted to an oil equivalent based on a conversion factor
                                 that is recommended to be based on a nominal heating content or calorific
                                 value equivalent to a barrel of oil.
 Chance                          Chance equals 1-risk. Generally synonymous with likelihood.
 Chance of Development           The estimated probability that a known accumulation, once discovered, will be
                                 commercially developed.
 Entitlement                     That portion of future production (and thus resources) legally accruing to an
                                 entity under the terms of the development and production contract or license.
 Mean                            The sum of a set of numerical values divided by the number of values in the
                                 set.
 MMboe                           Million barrels of oil equivalent
 Prospect                        A project associated with a potential accumulation that is sufficiently well
                                 defined to represent a viable drilling target.
 Prospective Resources           Those quantities of petroleum that are estimated, as of a given date, to be
                                 potentially recoverable from undiscovered accumulations.
 Reservoir                       A subsurface rock formation that contains an individual and separate natural
                                 accumulation of petroleum that is confined by impermeable barriers, pressure
                                 systems, or fluid regimes (conventional reservoirs), or is confined by
                                 hydraulic fracture barriers or fluid regimes (unconventional reservoirs).
 Royalty                         A type of entitlement interest in a resource that is free and clear of the
                                 costs and expenses of development and production to the royalty interest
                                 owner. A royalty is commonly retained by a resources owner (lessor/host) when
                                 granting rights to a producer (lessee/contractor) to develop and produce that
                                 resource. Depending on the specific terms defining the royalty, the payment
                                 obligation may be expressed in monetary terms as a portion of the proceeds of
                                 production or as a right to take a portion of production in-kind. The royalty
                                 terms may also provide the option to switch between forms of payment at
                                 discretion of the royalty owner
 Working Interest                An entity's equity interest in a project before reduction for royalties or
                                 production share owed to others under the applicable fiscal terms.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDEAXFEFEXEFEA