23 August 2022

88 Energy Limited

Project Icewine East Prospective Resource Estimate

88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or the Company) in compliance with ASX Listing Rules provides the following update in relation to the Prospective Resource estimate for Project Icewine East, as previously announced by 88 Energy on 10 August 2022 ("Icewine East Update"). Please refer to the Icewine East Update for information on Project Icewine East Prospective Resource estimates.

Following the Icewine East Update, 88 Energy now has two separate independent Prospective resource estimates for Project Icewine, as follows;

·     Project Icewine East: prepared by Lee Keeling and Associates; and

·     Project Icewine West: prepared by ERCE Equipoise Pte Ltd which was announced by the Company on 10 November 2020 ("Icewine West Update"). Please refer to the Icewine West Update for further details on the resource estimates for Project Icewine West.

The two independent prospective resource estimates cover separate and independently mapped resources.

Prospective Resources Estimate - Icewine East

The assessed maiden gross and net Prospective Resource estimates associated with 88 Energy's Icewine East acreage (~75% net working interest) are summarised below.

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.

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.

The data used to compile the independent prospective resource report includes reprocessed 2D seismic data, basin modelling, petrophysical analysis of publicly available wells and historical geological records.  The data was compiled and interpreted by 88E and was reviewed, validated and in some cases modified independently by LKA.

LKA's methodology for determining Prospective Resources for Project Peregrine

LKA has determined Prospective Resources by examining the areas of consistent bright amplitude that were mapped by independent consultants to 88E, Jordan and Pay, using the reprocessed 2D seismic data within the Icewine East area.  Parameters including potential pool area and thickness, porosity, hydrocarbon saturation, oil expansion and recovery factor were estimated on a probabilistic low, mid and high basis.  The Prospective Resources distributions were then aggregated into four (4) prospects, on the basis that one (1) well could effectively test all the mapped prospective intervals.  The unrisked prospective resources estimates (and associated geological chance of success) were modelled using Monte-Carlo analysis on the assumption there was no economic minimum and that volumes and risks of each of the prospective intervals within each prospect were independent.

The Prospective Resources have not been adjusted for phase risk or chance of development. 88 Energy and LKA have considered the chance of discovering oil over gas to be 100% for all targets except for the Kuparuk Formation which was assessed to be 70%. Chance of development has not been estimated.

Please refer to the disclaimers attached as Schedule 1 of this ASX release for more information on the prospective resource report.

About LKA

LKA is a U.S. based independently owned petroleum Reserves and Resources auditor and engineering consultants, providing expert consultancy services to the upstream oil and gas industry since 1957. LKA technical staff include a wide range of professionally qualified engineers and geologists, who provide geoscience, reservoir, facilities and cost engineering and economic/commercial expertise in conventional and unconventional projects.  Examples of current clients are noted on their website (https://www.lkaengineers.com/clients/) and include independent oil and gas operators, international, state and federal government agencies, bank and financial institutions, as well as legal and accounting firms.

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                                                                    

Neil McDonald / Derrick Lee                                                        Tel: + 44 131 220 6939

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.

SCHEDULE 1

Disclaimers:

Cautionary Statement for Prospective Resource Estimates - With respect to the Prospective Resource estimates contained within this report, it should be noted that the estimated quantities of gas that may potentially be recovered by the future application of a development project relate to undiscovered accumulations. These estimates have an associated risk of discovery and risk of development.  Further exploration and appraisal is required to determine the existence of a significant quantity of potentially moveable hydrocarbons. 

Hydrocarbon Resource Estimates - The Prospective Resource estimates for Project Icewine East presented in this report are prepared as at 9 August 2022.  The Prospective Resource estimates are quoted on an unrisked basis together with the geological chance of success for each prospect.  The unrisked mean total presented in the table is not representative of the expected total from the 4 prospects and assumes a success case in all reservoir intervals.  88 Energy and LKA have considered the chance of discovering oil over gas to be 100% for all targets except for the Kuparuk Formation which was assessed to be 70%. Chance of development has not been estimated. 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 LKA they must be used with caution.

Government Royalty and Overriding Royalty Interests - The Project Icewine East leases ("Leases") are situated in the State Lands of the North Slope of Alaska and are administered by the Alaskan Department of Natural Resources - Oil and Gas Division (DNR).  All leases issued by DNR are subject to a royalty and 88E's Leases are subject to a 12.5% government royalty.  In addition, the Leases are subject to an overriding royalty of 4.0% payable to non-related parties of the Company.  The net economic interest to 88E has therefore been calculated as 62.81% and the Net Entitlement Prospective Resources have been adjusted to reflect this.

Competent Person Statement Information - In this report information relating to hydrocarbon resource estimates have been supplied by LKA, and the company has stated in the Report that it has been prepared in accordance with the definitions and guidelines set forth in the Petroleum Resources Management System, 2018, approved by the Society of Petroleum Engineers and have been prepared using probabilistic methods.  Lee Keeling & Associates, Inc., the independent resource reviewer named in this document, has consented to the inclusion of information relevant to their review in the form and context in which it appears.  Dr Stephen Staley, who is a Non-Executive Director of the Company, has more than 37 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.

Forward looking statements - This document may include forward looking statements. Forward looking statements include, are not necessarily limited to, statements concerning 88E's planned operation program and other statements that are not historic facts. When used in this document, the words such as "could", "plan", "estimate", "expect", "intend", "may", "potential", "should" and similar expressions are forward looking statements. Although 88E believes the expectations reflected in these are reasonable, such statements involve risks and uncertainties, and no assurance can be given that actual results will be consistent with these forward-looking statements. The entity confirms that it is not aware of any new information or data that materially affects the information included in this announcement and that all material assumptions and technical parameters underpinning this announcement continue to apply and have not materially changed.

SCHEDULE 2

Definitions and Glossary of Key Terms:

SPE definition: Prospective Resource

Prospective resources are estimated volumes associated with undiscovered accumulations. These represent quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from oil and gas deposits identified on the basis of indirect evidence but which have not yet been drilled. This class represents a higher risk than contingent resources since the risk of discovery is also added. For prospective resources to become classified as contingent resources, hydrocarbons must be discovered, the accumulations must be further evaluated and an estimate of quantities that would be recoverable under appropriate development project(s) prepared.

Glossary of Key Terms