TIDM88E
RNS Number : 4399X
88 Energy Limited
20 December 2023
20 December 2023
88 Energy Limited
Year-End Shareholder Update
88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) ("88 Energy" or
the "Company") is pleased to provide shareholders with a summary of
its portfolio of projects.
88 Energy is nearing the conclusion of another busy year, having
set the foundation for what is expected will be a very bright 2024.
In the context of a changing global energy landscape and
challenging financial markets, 88 Energy has achieved several key
milestones which have led to meaningful growth in the scale,
quality, and diversity of opportunities within of our now global
oil and gas portfolio. The Company is on a clear path to building a
balanced portfolio of assets spread across the oil and gas
life-cycle.
Moving into 2024, shareholders can expect multiple high impact
events providing catalysts for value growth throughout the
year.
- We look forward to reporting the Hickory-1 flow test results
in March 2024, which we anticipate will be the first of 88 Energy's
wells to flow oil to surface.
- Project Leonis will see an independent, Certified Resource
Estimate completed before commencing a formal farm-out program in
1H24 in anticipation of a well in 2025/26.
- In Namibia, we are excited with the significant potential of
our new acreage position, with the results of the 2D seismic
program expected in 2H24. The objective of the 2D seismic program
is validation of the structural closures interpreted from airborne
gravity and magnetic data, the results of which will be used to
obtain a certified Prospective Resource Estimate and define
potential drilling locations. We will closely monitor results of
neighbouring 1Q24 drilling programs in the Owambo basin, which will
in part inform the future potential of the basin.
- At Project Longhorn, we have expanded our acreage and the number of cost-effective work-over opportunities. In 2024 we are targeting a five well work-over program set to increase production and cash flows over the course of the year.
ALASKAN EXPLORATION - A YEAR OF SIGNIFICANT PROGRESS
The Company's activities on the Alaskan North Slope were
underpinned by the successful Hickory-1 exploration well, which is
currently cased and suspended ahead of the flow test commencing in
February 2024. The Hickory-1 well was designed to appraise up to
six conventional reservoir targets with multi-million barrel oil
potential(1,2,3) .
Results from the Hickory-1 drilling and logging program were
positive, with oil shows and net log pay calculated across all
primary and secondary reservoirs. A new Upper Slope Fan System
(Upper SFS) reservoir was also identified which has not been
previously tested by any wells on the Project Pheonix acreage nor
the adjacent Pantheon Resources acreage to the north. The Upper SFS
had the best oil shows across all reservoirs intersected in the
Hickory-1 well and recently completed mapping of the Upper SFS
demonstrated a reservoir zone that is more laterally extensive than
previously considered.
We released a certified Independent Contingent Resource estimate
for Project Phoenix of 250 million barrels of oil equivalent(3)
from the deepest reservoir encountered in Hickory-1, the Basin
Floor Fan (BFF). The Contingent Resource was achieved by
demonstrating reservoir continuity through seismic and well data to
nearby third-party wells with successful flow tests in the BFF. The
confirmation of a Contingent Resource at the BFF reservoir level
enables the Hickory-1 well to be classed as a "discovery", but more
importantly, bodes well for the shallower and less thermally mature
(more oil prone) Slope Fan System (SFS) and Shelf Margin Delta
(SMD) reservoirs, where we will focus efforts during the upcoming
flow test operations.
The flow test and stimulation program has been carefully
designed in consultation with industry experts, utilising available
offset information as well as the detailed evaluation of Hickory-1
drilling and wireline logging data. Permitting for the upcoming
flow test is on track and All American Oilfield's upgraded Rig 111
module has been secured to complete the activities. Following
completion of the November placement, the flow test program is
fully funded and operations will commence in February 2024.
Further north at our Project Leonis acreage (formally awarded
April 2023), work has progressed at pace, with the reprocessing and
interpretation of 3D seismic as well as a review of regional well
data providing additional support for significant resource
potential in the Upper Schrader Bluff (USB). We will seek an
independent, Certified Resource Estimate before commencing a formal
farm-out program in 1H24. We are very pleased to have already
received in-bound farm-in interest for Project Leonis from multiple
parties. Due diligence is ongoing with these respected, large oil
and gas parties, and although there is no guarantee the Company
will conclude an agreement with these companies, it provides us
with encouragement ahead of a formal farm-out process.
At Project Peregrine, further exploration and technical analysis
built upon detailed re-processing of historical data, identified
the new N12 and N13 prospects in the prolific Nanushuk Formation.
The assessment also indicated that up to three independent
prospects could be assessed from a single ice pad via a sidetrack
from the Harrier-1 well pad, resulting in significantly lower
exploration costs. We are targeting a farm-out to fund any future
exploration efforts at Project Peregrine, although we expect that
clarity and resolution to the current consultation process
concerning future regulations in the NPRA will be required.
Additionally, further assessment of Project Icewine West
produced a clearer picture of the underlying potential within the
reorganised project area. We conducted mapping activities which
identified a series of SMD prospects, the majority of which have
yet to be drilled. Following recent exploration success with the
SMD reservoir at Hickory-1, we intend to investigate these
prospects to add to an already extensive Icewine West prospective
resource portfolio.
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 dated 23 August 2022 for pre-Hickory-1 estimates.
3 Refer announcement dated 6 November 2023 for post-Hickory-1
for post Hickory-1 drilling resource estimates.
NAMIBIA FRONTIER EXPLORATION - EXPANSION AND DIVERSIFICATION
In November 2023, we executed a three-stage farm-in agreement
for up to a 45% non-operated working interest in the onshore
Petroleum Exploration Licence (PEL 93) covering 18,500km(2) of
underexplored ground within the Owambo Basin in Namibia. We were
particularly attracted to the opportunity, secured on attractive
commercial terms, which provides exposure to a first-class
operating jurisdiction, with a highly competitive petroleum regime.
We believe that Namibia represents one of the last true frontiers
for multi-billion barrel onshore oil and gas discoveries.
PEL 93 benefits from existing infrastructure situated around the
Owambo Basin, enabling a clear pathway for future potential
commercialisation while retaining superior development optionality.
We look forward to beginning exploration activities in the coming
year, with a schedule aimed at delivering an initial program of
approximately 200 line-kilometres of low-impact 2D seismic. This
will enable validation of ten significant structural closures in a
well-defined sedimentary basin with proven oil charge, reservoirs,
and seals.
PROJECT LONGHORN - EXPANSION OF ACREAGE AND PRODUCTION
POTENTIAL
Our ongoing exploration activities have been supplemented by
operations at Project Longhorn. Oil has flown steadily from our
producing wells across the Texas Basin over the past year, with a
combined gross total of 136,000 BOE (68% oil) production achieved.
As a producing asset, Longhorn is an important component of our
diversified portfolio and we have taken steps to expand our
holdings across this region.
In July 2023, we acquired an additional interest in new leases
located four miles from our existing Longhorn assets at a
non-operated 45% net working interest. These leases encompass 399
net acres with net 2P reserves of 1.1MMBO (refer announcement dated
15 December 2023). This month we acquired 64% net working interest
in an additional 1,262 net acres less than one mile north and one
mile south of Project Longhorn. These acquisitions provide multiple
development opportunities and additional production to enhance our
current output of 370 BOE per day.
Longhorn remains a highly promising region with excellent
drilling and work-over opportunities and the increase in our
acreage position by 270% over the year indicates the commitment and
value we see in its future. Subject to further analysis, we intend
to further expand our holdings across the Texas Basin, in parallel
with our other exploration activities in Alaska and Namibia .
CORPORATE ACTIVITIES
The Company's recently completed capital raising of A$9.9
million (before costs) ensures 88 Energy is well-placed to progress
the aforementioned opportunities, including the imminent Hickory-1
flow test, on a timetable that maximises the value of our
portfolio. We are encouraged by Project Phoenix's JV partner
Burgundy Xploration's recent progress on securing funding and their
commitment to Project Phoenix.
In other corporate initiatives, 88 Energy's Board will consider
in the new year whether a share consolidation in 2024 is in the
best interests of shareholders, and if 88 Energy decides to
undertake a share consolidation, shareholders will be able to vote
on this at the 2024 AGM.
I would like to thank our new and long-term shareholders for
their continued support. The recent oversubscribed placement was a
strong endorsement of the confidence that our investors place in
us, and we intend to deliver on this faith.
On behalf of 88 Energy's team, I look forward to updating you on
further progress as we continue high-impact exploration of our
world-class portfolio. Have a safe, restful holiday season and a
Happy New Year.
Best regards,
Ashley Gilbert
Managing Director, 88 Energy
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
Cavendish Capital Markets Limited Tel: +44 (0)20 7397 8900
Derrick Lee Tel: +44 (0)131 220 6939
Pearl Kellie Tel: +44 (0)131 220 9775
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