27 February 2023

88 Energy Limited

Hickory-1 Pre-Spud Operations On Track

Highlights

·     Ice pad construction nearing completion.

·     Mobilisation of the Nordic Calista Rig-2 and operations equipment to commence shortly.

·     Spud of Hickory-1 well on track for early March 2023.

88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or the Company) is pleased to report that the Hickory-1 ice pad construction is nearing completion and that pre-spud operations are on schedule. The Hickory-1 well is located within 88 Energy's Project Phoenix acreage, directly adjacent to the Trans-Alaska Pipeline System and the Dalton Highway.

Mobilisation of Nordic Calista's Rig-2 to the Hickory-1 well location is expected to commence shortly, together with equipment and services relating to the well operations. Hickory-1 spud remains on track for early March 2023.

The well is designed to appraise up to six conventional reservoir targets within the SMD, SFS, BFF and KUP reservoirs and 647 million barrels of oil^1,2 and is permitted to a total depth (TD) of up to 12,500 feet. The primary targets for the well are the 3 SMD reservoirs (SMD-A, B and C), with the SFS and BFF reservoirs considered secondary targets. The KUP reservoir is a tertiary target and will be drilled subject to time remaining in the season, borehole conditions and other technical considerations.

The Hickory-1 surface hole is planned to be drilled to 3,500 feet, with 9 5/8" surface casing installed and the blow-out preventer system tested. This is anticipated to take up to two weeks in total. Drilling to TD is then expected to take a further two weeks, at which point a targeted wireline logging program is scheduled.

Flow testing of the Hickory-1 well is planned to be undertaken during the 2023/24 winter season, subject to well results. This will provide ample time, subsequent to drilling of the well, to optimise the flow test program, design, permitting and implementation.

1.   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.

2.    Mean unrisked resource - Net Entitlement to 88 Energy. Refer announcement released to ASX on 23 August 2022

Figure 1: Hickory-1 well designed to test up to 6 stacked targets.

Figure 2: Nordic Calista Rig-2 preparations ahead of mobilisation to Hickory-1 drilling location

This announcement has been authorised by the Board.

Media and Investor Relations

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 Project Phoenix

Project Phoenix (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, slope and bottom-set sands of the Mid Schrader Bluff, Canning and Seabee formations. Independent mapping has demonstrated that these plays extend into the Phoenix acreage.

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

Figure 1: Project Phoenix lease area, including mapped play fairways, Franklin Bluffs 3D area and planned Hickory-1 well location (subject to permitting, as well as JV and Government approvals).

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 Phoenix.

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 movable hydrocarbons.