7 December 2017
88 Energy
Limited
North Slope 2017W
Leasing Update
88 Energy Limited (“88 Energy”, “the Company”, “Operator”) (ASX,
AIM: 88E) is pleased to provide an update on its projects, located
onshore North Slope of Alaska.
Highlights
Bid Details
88 Energy Ltd via its subsidiary companies, Accumulate Energy
Alaska Inc and Regenerate Alaska Inc, was announced high bidder on
32,800 gross acres on 6th December (AK time) as part of
the North Slope Areawide 2017W lease sale.
The two parcels are subject to regulatory approvals and formal
award, expected in 2018. Joint Venture Partner, Burgundy Xploration
LLC, has a right to back in to ~2,590 acres contained within Parcel
1, adjacent and to the west of the existing Project Icewine
leases.
Additional detail will be provided on the new leases in due
course.
*approximate outline of existing
acreage currently under award
Managing Director, Dave Wall,
commented: “This result is a continuance of our acreage
expansion plan on the North Slope and the Company is very pleased
to be announced high bidder at the recent lease sale. Additional
details in relation to both parcels will be announced in due
course.”
Media and Investor Relations:
88 Energy Ltd
Dave Wall, Managing Director
Tel: +61 8 9485 0990
Email: admin@88energy.com
Finlay Thomson, Investor
Relations Tel: +44 7976 248471
Hartleys Ltd
Dale Bryan Tel: + 61 8 9268
2829
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, Mr Brent
Villemarette, who is a Non-Executive Director of the
Company. Mr Villemarette has more than 35 years' experience in the
petroleum industry, is a member of the Society of Petroleum
Engineers, and a qualified Reservoir Engineer 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. Mr Villemarette 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.
Project Icewine Overview
In November 2014, the Company
entered into a binding agreement with Burgundy Xploration
(BEX) to acquire a significant working interest (87.5%,
reducing to 77.5% on spud of the first well on the project) in a
large acreage position on a multiple objective, liquids rich
exploration opportunity onshore Alaska, North
America, referred to as Project Icewine. The current gross
acreage position is 458,097 contiguous acres (286,589 acres net to
the Company).
The Project is located on an all year operational access road
with both conventional and unconventional oil potential. The
primary term for the State leases is 10 years with no mandatory
relinquishment and a low 16.5% royalty.
The HRZ liquids-rich resource play has been successfully
evaluated based on core obtained in the recently completed
(December 2015) Icewine #1
exploration well, marking the completion of Phase I of Project
Icewine. Phase II has now commenced, with drilling at the follow-up
appraisal well, Icewine#2, commencing early 2Q2017. Production
testing is ongoing.
Significant conventional prospectivity has also been identified
on recently acquired 2D seismic across the project acreage.
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.
Exploration incentives provided by the State of Alaska with up to 35% of net
operating loss refundable in cash were concluded for all
expenditure post 30 June 2017.
The primary objective is an untested, unconventional
liquids-rich shale play in a prolific source rock, the HRZ shale
(Brookian Sequence), that co-sourced the largest oil field in
North America; the giant Prudhoe
Bay Oil Field Complex. Internal modelling and analysis indicates
that Project Icewine is located in a high liquids vapour phase
sweetspot analogous to those encountered in other Tier 1 shale
plays e.g. the Eagle Ford, Texas.
Recently acquired 2D seismic has identified large conventional
leads at Project Icewine within the same Brookian petroleum system
and shallow to the HRZ shale, including potential high porosity
channel and turbiditic sands associated with slope apron and
deepwater fan plays. The Brookian conventional play is proven on
the North Slope; the USGS (2013) estimated the remaining oil
potential to be 2.1 billion barrels within the Brookian sequence.
Two recent discoveries in the Brookian have already exceeded these
estimates, with Armstrong/Repsol
discovering 1.4 billion barrels in 2015 and Caelus announcing a 2.5
billion barrel discovery in 2016. Additional conventional potential
exists in the Brookian delta topset play, deeper Kuparuk sands and
the Ivishak Formation.
A Prospective Resources Report by DeGolyer and MacNaughton, was
commissioned by 88 Energy to evaluate the unconventional resource
potential of Project Icewine in February
2016 and was released to the market on 6th
April 2016.
About 88 Energy:
88 Energy has a 77.5% working interest and operatorship in ~325,000
acres onshore the prolific North Slope of Alaska (“Project Icewine”). Gross contiguous
acreage position for the Joint Venture is 458,097 acres (88E
286,589 net acres). The North Slope is the host to the 15 billion
barrel Prudhoe Bay oilfield
complex, the largest conventional oil pool in North America. The Company, with its Joint
Venture partner Burgundy Xploration, has identified highly
prospective play types that are likely to exist on the Project
Icewine acreage – two conventional and one unconventional. The
large unconventional resource potential of Project Icewine was
independently verified by leading international petroleum resource
consultant DeGolyer and MacNaughton. In addition to the interpreted
high prospectivity, the project is strategically located on a
year-round operational access road and only 35 miles south of Pump
Station 1 where Prudhoe Bay feeds
into the Trans Alaska Pipeline System. The Company acquired 2D
seismic in early 2016 to take advantage of the globally unique
fiscal system in Alaska, which
allowed for up to 75% of 1H2016 exploration expenditure to be
rebated in cash. Results from the seismic mapping and prospectivity
review are encouraging, and form the basis of a conventional
prospectivity portfolio for Project Icewine. In late 2015, the
Company completed its maiden well at the project, Icewine#1, to
evaluate an unconventional source rock reservoir play which yielded
excellent results from analysis of core obtained from the HRZ
shale. The follow-up well with a multi-stage stimulation and test
of the HRZ shale, Icewine#2, spud in early 2Q2017. Flow testing at
Icewine#2 is scheduled to re-commence in April/May 2018.