TIDM88E
RNS Number : 2049C
88 Energy Limited
28 September 2018
28(th) September 2018
88 Energy Limited
Operations Update
88 Energy Limited (ASX: 88E) ("88 Energy" or the "Company")
provides the following update related to its operations, located on
the North Slope of Alaska.
Highlights
-- Agreements executed for additional 45,239 acres net to 88 Energy
Leasing update
88 Energy Ltd, via its wholly owned subsidiary Accumulate Energy
Alaska Inc. ("Accumulate"), has entered into an agreement with
Arctic Slope Regional Corporation, ("ASRC"), to lease the
hydrocarbon rights across 28,453 acres contiguous with the Western
Fairway area of the Company's current Project Icewine acreage
(leasehold 100% net to Accumulate). The ASRC lease terms are
consistent with those recently awarded by the State of Alaska, post
the December 2017 Licensing Round.
Accumulate has also entered into an agreement with Great Bear
Petroleum to acquire a 69.1% working interest in 24,269 acres
adjacent to, and north of, the Central Play Fairway at Project
Icewine (16,786 acres net to Accumulate). Consideration for the
leases was a cash payment of US$206,388 (net to 88E), of which
US$167,663 will be directed to lease rentals due by 1(st) October
2018.
The two acquisitions increase 88 Energy's lease position by
45,239 net acres to 371,478 net acres across the Company's three
main project areas on the Central North Slope of Alaska. A map
showing the increased acreage position is available at the
following link -
http://www.rns-pdf.londonstockexchange.com/rns/2049C_1-2018-9-27.pdf
Managing Director, Dave Wall, commented: "The agreement with
ASRC in relation to the western leases is significant as they are
partly covered by several prospects that are in our current
conventional farm-out package. We would like to thank ASRC for the
opportunity to partner with them in this area.
Additionally, the Central Fairway acquisition has delivered
additional acres close to the road and pipeline that are considered
prospective for both the HRZ and conventional plays."
About ASRC: The Arctic Slope Regional Corporation is the largest
locally owned and operated business in Alaska, with approximately
12,000 employees, including nearly 4,000 in Alaska. ASRC is a
private, for-profit corporation which is owned by and represents
the business interests of its 13,000 Iñupiat Eskimo shareholders.
ASRC owns title to nearly five million acres of land on Alaska's
North Slope which contain a high potential for oil, gas, coal and
base metals. Corporate headquarters are based in Utqia vik
(Barrow), Alaska, with administrative and subsidiary offices
located in Anchorage and throughout the United States. The
Corporation reported total revenue of USD 2.6 billion in FY2017
(Alaska Business Monthly, 2018). In late 2017, the corporation
marked a milestone by surpassing USD 1 billion in dividend payments
to shareholders since the corporation was formed in 1972.
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 30 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
In November 2014, the Company entered into a binding agreement
with Burgundy Xploration (BEX) to acquire a significant working
interest 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 525,000 contiguous acres (349,000 acres net to the Company).
These are marked in blue and red on the below map.
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.
Significant conventional prospectivity has been identified on
recently acquired 2D and 3D seismic across the project acreage
where 1.75 billion barrels of oil potential has been delineated
(net mean prospective resource). A farm-out process is currently
underway, with a deal targeted prior to 2018 year end.
The HRZ liquids-rich resource play was successfully evaluated
based on core obtained in the Icewine#1 exploration well (December
2015), marking the completion of Phase I of Project Icewine. Phase
II comprised drilling in mid 2017 at the follow-up appraisal well,
Icewine#2, which was subsequently fracture stimulated and flow
tested. Production testing at Icewine#2 concluded on 30 June 2018
after retrieving 24.8% of the injected stimulation fluid vs a
targeted return of at least 30%. Gas rates of up 100mcf/d were
achieved during flowback; however, these are not considered
representative due to limited reservoir connectivity. Further
evaluation is being completed prior to launching a formal farm-out
process in early 2019 to fund the future work program.
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.
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 6(th) April 2016.
Yukon Gold
The Yukon Gold leases are located on the eastern border of the
Central North Slope of Alaska and were acquired in 2018. 88 Energy
via its subsidiary has a 100% working interest in these leases,
totalling 14,194 acres. The leases contain an historic discovery
well, Yukon Gold #1, which is currently being evaluated internally.
3D seismic was acquired in early 2018 to assist with this process
and results are expected in 4Q2018. The leases are marked in yellow
on the above map.
Western Blocks
88 Energy is earning a 36% working interest in four leases
(totalling 22,711 acres) immediately adjacent to the Horseshoe#1/1A
oil discovery well. 88 Energy, with its consortium partners Otto
Energy Ltd and Red Emperor Resources NL, has posted a US$3m
performance bond to the State of Alaska and will fund 100% of the
costs of well, targeting a prospect with a gross mean unrisked
prospective resource volume of 400MMbbls (144MMbbls net to 88E), to
be drilled in 1Q 2019. The leases are marked in green on the above
map.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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