REG - 88 Energy Limited - Selection of Drilling Location in Icewine East

88 EnergyAnnouncement

05/09/2022 07:00

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RNS Number : 2410Y  88 Energy Limited  05 September 2022

This announcement contains inside information

 

5 September 2022

 

88 Energy Limited

Selection of Drilling Location in Icewine East following Interpretation of
available 3D Seismic data set

Highlights

·   Completion of the interpretation of the recently licensed Franklin
Bluffs 3D seismic survey data (FB3D), which covers a significant area over the
Icewine East leases.

·   Amplitude Variation with Offset (AVO) analysis has been used to define
'sweet spots' for each play to help identify location for the 1H 2023
exploration well, Hickory-1.

·   Significantly, the Fluid Factor attribute has identified areas of
anomalous AVO behaviour within the FB3D area which could indicate hydrocarbon
content and/or superior pore volume (reservoir quality). AVO analysis is often
used as a direct hydrocarbon indicator to enhance existing 2D and 3D
interpretation and improve the probability of geological success.

·   Good correlation has also been observed between AVO signature, RMS
amplitude and the geological model at Icewine East.

·   The Hickory-1 well will test the SMD, SFS, BFF and Kuparuk reservoir
units, which are interpreted to extend from Pantheon Resources' (Pantheon)
acreage onto Icewine East. The Pantheon wells - Alkaid-1, Talitha-A and Theta
West-1 - have flowed 35⁰ to 40⁰ API oil from multiple Brookian reservoirs
(see Pantheon releases of 7 February, 21 February and 24 March 2022).

·   Planning and permitting for drilling of the Hickory-1 exploration well
in 2023 has commenced.

·   The Hickory-1 well location is adjacent to the Trans Alaskan Oil
Pipeline route and the Dalton Highway, the main north-south all-weather road.

88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or the Company) is
pleased to advise that the interpretation of the recently licensed FB3D, which
covers a significant area of the Project Icewine East leases, has been
completed.

Results from this analysis and interpretation have been used to define 'sweet
spots' for each of the mapped Shelf Margin Delta (SMD), Slope Fan System
(SFS), Basin Floor Fan (BFF) and Kuparuk (KUP) play fairways. This analysis
has played a key role in identifying the drilling location for the planned
2023 exploration well, Hickory-1, which is designed to intersect and test all
four key play fairways.

Interpretation of the FB3D data included AVO analysis, where a comprehensive
study of the FB3D seismic gathers across all offsets, ultimately produced a
series of AVO attributes (such as fluid factor). These attributes can be used
to further enhance existing 2D and 3D interpretation and reservoir
understanding, as well as improve the probability of geological success and
refine selection of target drilling locations.

Significantly, it was observed that the Fluid Factor attribute has identified
areas of anomalous AVO behaviour within the FB3D area, which could indicate
hydrocarbon content and/or superior pore volume (reservoir quality). It was
also observed that good correlation existed between AVO signatures, RMS
amplitude and the geological model at Icewine East.

Hickory-1 exploration well

The Hickory-1 exploration well is currently planned to be drilled during H1
2023 and has been designed as a vertical well to be drilled to approximately
12,500 feet to intersect and test all four key reservoirs noted in the
recently announced prospective resource estimates for Icewine East.

Using the results from the initial analysis and interpretation of the FB3D, in
combination with Icewine-1 well logs, 88 Energy has identified an optimal
drilling location for Hickory-1, located adjacent to the Dalton Highway. This
location intersects and will test the substantial potential oil volumes noted
across all mapped play fairways, and in particular the SMD and BFF
reservoirs.  The well location is subject to permitting, as well as Joint
Venture (88E 75.2% WI) and Government approvals.

Managing Director, Ashley Gilbert, commented:

"We continue to advance our Icewine East acreage towards the planned drilling
of an exploration well next year. Importantly, the Hickory-1 well, and more
generally the Icewine East acreage, has been significantly de-risked by the
recent drilling and flow tests carried out on the adjacent acreage by Pantheon
Resources, as well as data from the Icewine-1 well logs and the richly
detailed FB3D data set. These existing data sets, and the multi-disciplinary
evaluation undertaken on them, substantially increases our confidence in
unlocking the potential of the Icewine East acreage."

The below graphics can be viewed in the pdf version of this announcement,
which is available on the Company's website www.88energy.com:

 

·   Figure 1: Regional seismic dip line through Icewine East annotated with
Icewine-1 petrophysical data (log pay) as well as preliminary AVO results over
the SMD reservoirs. The warmer colours represent potential hydrocarbon
accumulations AND/OR higher relative pore space (a proxy for improved
reservoir quality). The white circle denotes the position of the proposed
Hickory-1 well, while the circle with the black cross indicates the Icewine-1
position.

·   Figure 2: Icewine East lease area, including mapped play fairways and
planned Hickory-1 well location (subject to permitting, as well as JV and
Government approvals).

·   Figure 3: Icewine East lease area, including mapped play fairways,
Franklin Bluffs #d area and planned Hickory-1 well location (subject to
permitting, as well as JV and Government approvals).

·   Figure 4: Icewine East Reservoir Schematic.

 

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                                Tel: +61 8 9268 2829

 Dale Bryan

 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 Icewine East

Project Icewine East (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- and bottom-set sands of the
Schrader Bluff and Seabee formations. Independent mapping has demonstrated
that these plays extend into the Icewine East acreage.

 

Icewine East holds an estimated unrisked conventional total of 647 MMbbl of
prospective oil resources (mean unrisked, net to 88E), independently assessed
by Lee Keeling and Associates 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, as well as data from
Icewine-1 well logs (encountered 380 ft of net oil pay within SMD sands) and a
detailed 3D seismic data set (FB3D).

 

 Icewine East: 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 Icewine East.

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.

 

88 Energy is pursuing an infrastructure-led exploration strategy at Icewine
East. The Icewine East acreage is strategically located near to the Dalton
Highway and with the Trans-Alaska Pipeline System (TAPS) transecting it. This
delivers an immediate potential export route, expediting future development
activities and, crucially, minimising costs and potential environmental
impacts.

The Hickory-1 exploration well is currently planned to be drilled at Icewine
East during H1 2023. The selected location is adjacent to the Dalton Highway.
It is a vertical well designed to intersect and test all four key target
reservoirs at Icewine East.

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