REG - 88 Energy Limited - Project Leonis Update

88 EnergyAnnouncement

27/06/2023 07:15

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230627:nRSa0249Ea&default-theme=true

RNS Number : 0249E  88 Energy Limited  27 June 2023

This announcement contains inside information

27 June 2023

 

88 Energy Limited

Project Leonis Update

Highlights

·   Awarded in April 2023, Project Leonis is superbly located adjacent to
TAPS and the Dalton Highway, enhancing future potential commercialisation
pathways

·   Project Leonis is covered by the Storms 3D seismic data suite and
contains the Hemi Springs Unit #3 exploration well (drilled by ARCO in 1985)

·   Initial review of the Hemi Springs Unit #3 well has indicated
approximately 200 feet of logged bypassed net pay in the Upper Schrader Bluff
(USB) reservoir, with good porosity and oil shows, including "oil over
shakers" noted at multiple depths

o  The USB reservoir is a producing unit to the north (including West Sak,
Orion and Polaris fields) and was not a zone of interest for ARCO

·   Reprocessing of the Storms 3D data by an independent expert has
improved seismic resolution and data quality and provided an initial
assessment of the USB prospect boundary

·   Next steps for the Company are to obtain an independent certified
prospective resource report, continue planning and permitting for a potential
exploration well coupled with a targeted farm-out

88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or the Company) is
pleased to provide an update on the Project Leonis work program. The Project
Leonis acreage was awarded in April 2023 to 88 Energy Limited (via its wholly
owned subsidiary, Captivate Energy Alaska, Inc) and comprises ten leases
covering approximately 25,430 contiguous acres. The acreage is superbly
located adjacent to TAPS and the Dalton Highway, enhancing future potential
commercialisation pathways.

Project Leonis is fully covered by the Storms 3D seismic data suite which was
purchased by 88 Energy in 2022. An initial internal review and interpretation
of the Storms 3D seismic data has revealed a strong seismic-well tie and a
clear seismic amplitude at the USB prospect level. To further assess the
reservoir potential, and improve imaging of local and regional faulting noted
as part of the initial assessment of the data, 88 Energy contracted an
independent expert to complete reprocessing of the Storms 3D data to improve
data quality and seismic resolution.

 

 

 

 

 

 

88 Energy is pleased to report that the seismic reprocessing has been
successfully completed with results showing a significant improvement in
quality and resolution shown in Figure 1 below.

 

 

 

Figure 1: Comparison of original (left) and reprocessed (right) Storms 3D
data.

 

The improved reprocessed data will help the Company define and assess the
prospectivity of the acreage. An initial interpretation of the reprocessed
data has provided the Company with an updated understanding of the potential
USB prospect boundary, noted in Figures 2 and 3 below, and the potential for a
significant resource within the Project Leonis acreage.

 

Figure 2: Initial interpretation of reprocessed 3D Storms 3D data suite and
preliminary USB boundary assessment.

The Company has assessed the aerial extent of the USB prospect to be up to
60km(2). To validate the mapping of the reprocessed seismic data, 88 Energy
has engaged an independent expert utilising a suite of specialist fault and
horizon interpretation software, which will enable the Company to better
understand the petroleum system at Project Leonis including identifying and
capturing finer stratigraphic and structural features. Once completed in Q3,
88 Energy intends to commission an independent maiden prospective resource
estimate over the acreage.

 

 

The Project Leonis acreage contains the Hemi Springs Unit #3 exploration well
(HS-3) which was drilled by ARCO in 1985 to target the deep Kuparuk and
Ivishak reservoirs. The well logs from HS-3 indicated approximately 200 feet
of low resistivity bypassed log pay within the USB formation, with good
porosity and oil shows evident throughout.

Independent studies to identify pay in laminated or shaley sand systems have
confirmed that the USB reservoir in Hemi Springs Unit #3 possesses similar
characteristics to the producing Polaris and Orion fields to the north. These
studies have also confirmed a good seismic tie between HS-3 and the Storms 3D
using sonic velocities from HS-3.

 

The reservoir interval presents as a continuous, low amplitude peak as a
function of having porous sands throughout the section. Preliminary internal
interpretation of the Storms 3D seismic indicates that the USB reservoir has
been penetrated by Hemi Springs Unit #3 and appears to be isolated from nearby
wells due to the complex faulting of this region.  Interpretation using
modern Edge Detection attribute (see Figure 4) clearly shows NW-SE normal
faulting as well as a NE-SW feature which separates the reservoir at HS-3 from
that of nearby Hailstorm-1. The petrophysical model supports the Company's
seismic interpretation.

Figure 4: Time slice of Variance/Edge Detection attribute (used to highlight
discontinuities in seismic horizons) run on the Storms 3D seismic.

 

Critical rationale for investing in Project Leonis, is that the HS-3
exploration well drilled in 1985 by ARCO, was not targeting the USB low
resistivity pay. More recently, the USB reservoir has been successfully
developed at the nearby Orion, Polaris, West Sak and Milne Point oil fields to
the North. Internal petrophysical analysis indicates that the Orion field 'O'
sands developed in the 2000's and now producing presents as a good analogue
for the USB reservoir at Project Leonis.

The Polaris oil field, located 15 miles to the north of the Project Leonis
acreage, is estimated to contain 300 to 550 million stbo in place within the
'O' sands (source: page 25, Polaris Pool Rules And Area Injection Order
Application, BP Exploration (Alaska), Inc, Sep 2002).

Figure 5: Location of nearby producing analogue fields to Hemi Springs Unit #3
well / Project Leonis.

 

Further petrophysical work is ongoing, including an integrated review of all
available log, core and test data from numerous offset exploration wells as
well as the nearby producing wells within the West Sak, Polaris and Orion oil
pools.

Figure 6 below, provides a high-level indication of the forward work program
for the Project Leonis acreage, including the planned farm-out of a working
interest in the acreage to fund a well targeted to be drilled in 2024/25.

 

Figure 6: Project Leonis lease activity

 

The Company looks forward to providing further updates on Project Leonis in
due course.

 

 

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 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.

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  MSCPPUCCQUPWUCM