88 Energy Limited (88E.ASX.L) Spud of the Merlin-2 appraisal well in February 2022

MERLIN-2 OPERATIONS UPDATE

Highlights

· Snow road construction preparations underway for Merlin-2 drilling operations

· Merlin-2 appraisal well permitting well advanced, with the Permit to Drill expected to be issued around year-end

· Commissioning of the Arctic Fox rig scheduled for January 2022

· Spud of Merlin-2 appraisal well on track for February 2022

· Contractor to accept pre-payment in 88E shares reflecting support for Merlin-2 opportunity

88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (” 88 Energy” or the ” Company” ) is pleased to provide an update on operations at 88 Energy’s Project Peregrine. Operations remain on track for the spud of the Merlin-2 appraisal well in February 2022, with snow road construction preparations underway and construction expected to commence prior to the end of 2021, subject to weather conditions.

Pre-commissioning inspection of the Arctic Fox rig is planned for early January, with an inspection prior to contracting the rig confirming it to be in excellent condition. Commissioning of the rig is expected to occur following the rig inspection in January 2022 and immediately prior to mobilisation to the Merlin-2 drill site.

A key contractor involved in the Merlin-2 operations who provides snow road and drilling management services including significant operational, logistic, permitting and government liaison services, contractor management, co-ordination of accounts payable support and payment management has agreed to accept payment in new ordinary shares in 88 Energy for payment of up to US$7,500,000 worth of invoices which will be incurred in relation to services associated with the Merlin-2 operations provided by a contractor, demonstrating support for the Merlin-2 well proposition and broader Project Peregrine opportunity. In consideration, 88 Energy has agreed to issue the contractor 407,650,000 new ordinary shares (“New Shares”) at a price of A$0.026 per share to the vendor.

The New Shares will be issued as a pre-payment for services and are to be held in escrow and subject to certain restrictions. The New Shares will only be released from escrow following approval by 88 Energy. The vendor has the option to dispose of the New Shares, subject to certain restrictions under the escrow arrangement, however any proceeds will be held in trust until the associated invoices are received and approved by 88 Energy. A reconciliation and final payment of any outstanding invoices (in cash) is to occur following completion of Merlin-2 drilling operations.

Payment of a proportion of Merlin-2 costs through the issue of the New Shares further solidifies the Company’s strong financial position ahead of commencement of the Merlin-2 well and planned testing program.

Permitting for the Merlin-2 appraisal well remains on track for scheduled spud in February 2022, with the Permit to Drill expected to be approved and issued around the end of the year.

The Merlin-2 appraisal well is planned for a Total Depth of 8,000 feet, and is targeting 652 million barrels of oil 1,2 in the highly prospective N18, N19 and N20 targets that were encountered in the successful Merlin-1 well (drilled in March 2021 to a depth of 5,267 feet), which demonstrated the presence of oil in these multiple stacked sequences within the Brookian Nanushuk Formation

Further details on the upcoming operations at the highly prospective Merlin-2 appraisal well, and the Company’s other activities, are contained in the Company’s latest corporate presentation, which is available on 88 Energy’s website at www.88energy.com.

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 16 August 2021

The below graphics can be viewed in the pdf version of this announcement, which is available on the Company’s website www.88energy.com

· Wireframe image showing respective Merlin-1 and Merlin-2 well locations, facing east and overlain with predicted reservoir sands profile.

· Project Peregrine and Recent Nanushuk Discoveries.

Media and Investor Relations:

88 Energy Ltd

Ashley Gilbert, Managing Director

Tel: +61 8 9485 0990

Email:investor-relations@88energy.com


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