88 Energy Limited – Hickory-1: BFF Maiden Contingent Resource Estimate

Hickory-1: Confirmed Discovery

with BFF Maiden Contingent Resource Estimate

Highlights

·    Maiden Independent Contingent Resource estimate completed at Project Phoenix for the Basin Floor Fan (BFF) reservoir.

·    Gross Best Estimate (2C) Contingent Resource of 250 Million Barrels of Oil Equivalent (MMBOE) from the deepest reservoir encountered in Hickory-1, the BFF, comprised of;

o 136 million barrels (MMbbl)* of recoverable hydrocarbon liquids (Oil and NGL); and

o 628 billion cubic feet (BCF)* of recoverable gas.

·   Independently certified Contingent Resource assessment prepared by Netherland, Sewell & Associates, Inc. (NSAI), a leading US based independent consultancy for the petroleum industry.

·    Contingent Resources defined on the basis of multiple successful flow tests conducted in the BFF reservoir on adjacent acreage and clear reservoir continuity demonstrated through high quality seismic data and correlations across Hickory-1 and Icewine-1 to the neighbouring successful wells.

·    Assessment carried out by NSAI confirms discovery status for the BFF reservoir prior to planned testing operations at Hickory-1.

·    Key step towards the understanding of the hydrocarbon volumes in of Project Phoenix prior to Hickory-1 testing operations. If successful, these operations will allow additional contingent resources to be assigned to the shallower SMD-B and SFS reservoirs.

88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or the Company) is pleased to report a maiden, independently certified Contingent Resource estimate of 136 MMbbl of hydrocarbon liquids (gross best estimate (2C)) and 628 BCF of gas, for the BFF reservoir in Project Phoenix (~75% net working interest).

* Gross (100%) best estimate contingent resource. Natural Gas Liquids (NGL’s) are converted to oil equivalent volumes on a constant ratio basis of 1:1. Gas is converted to oil equivalent volumes on a constant ratio basis of 5.5 BCF per 1 MMBoe.

Managing Director, Ashley Gilbert, commented:

“This maiden Contingent Resource is a great result for 88E and its shareholders. It represents an important milestone on the path to the possible development of Project Phoenix, even prior to flow testing operations at Hickory-1 this upcoming season.

We look forward to the upcoming planned Hickory-1 flow tests which, if successful, will enable the certification of additional contingent resources in the shallower reservoirs and move another step closer to appraising the discovery. We remain on track for Q1 2024 operations for this exciting project.”

NSAI’s maiden Independent Contingent Resource Report was completed after its review of an extensive data suite that included seismic data, well logs from Hickory-1 and Icewine-1 and certain data from wells in adjacent acreage including flow test data. NSAI is a leading independent US-based expert petroleum asset evaluation firm with significant and recent experience in providing resource estimates globally, as well as more specifically in Alaska.

NSAI confirmed that the following requirements were met by the Company to achieve a Contingent Resource classification for the BFF reservoir:

·     Multiple successful flow tests for the same reservoir in adjacent acreage.

·     Clear reservoir continuity was demonstrated through high quality seismic data and correlations across all four wells, Talitha-A, Theta West-1, Hickory-1 and Icewine-1.

·     Log data, petrophysical interpretations and reservoir conditions across all four wells demonstrated sufficient similarity to confirm producibility in Project Phoenix.

·     All existing data was integrated consistently and coherently which established the existence of a known petroleum accumulation in the BFF reservoir in Project Phoenix.

This assessment confirms a discovery status at Hickory-1 and Icewine-1 for the BFF reservoir in Project Phoenix and further validates 88 Energy’s internal assessments of Project Phoenix.

Further, the certification of a Contingent Resource for the BFF reservoir allows the Company to focus the Hickory-1 flow testing on the shallower reservoirs (SMD-B and SFS), with any further testing of the BFF reservoir optional and contingent on JV funding and approvals.

The forward work-program to assess the viability of the commercial development of the BFF reservoir, either in isolation or together with the shallower reservoirs, as well as addressing each of the contingencies, will occur subsequent to the flow testing at Hickory-1 which is scheduled for the upcoming Alaskan winter operational season.

Contingent Resources Estimate – Basin Floor Fan, Project Phoenix

The assessed maiden Contingent Resource estimate associated with the BFF reservoir in Project Phoenix (~75% net working interest  to 88E and ~63% net entitlement) is summarised below.

 1. 88 Energy net resources have been calculated using a 75.227% working interest and a 16.5% royalty.

2. 88 Energy cautions that the reported totals for Oil+NGL and Total MMBOE are an arithmetic sum of the individual hydrocarbon types within the BFF reservoir. The arithmetically summed 1C estimate may be a conservative estimate and the arithmetically summed 3C estimate may be optimistic when compared to a statistical aggregation of probability distributions.

3. The Contingent Resource classification is not required to be adjusted for the chance of development, as per PRMS 2018 guidance, and hence has not been carried out in this assessment.

4. Natural Gas Liquids (NGL’s) are converted to oil equivalent volumes via a constant ratio of 1:1. Gas is converted to oil equivalent volumes via a constant ratio of 5.5 BCF per 1 MMBoe.

Cautionary Statement:

Please refer to the disclaimers attached as Schedule 1 of this release for more information on the contingent resource report.

About NSAI

Founded in 1961, NSAI is a worldwide leader in petroleum consulting and advisory services. NSAI specializes in multi-disciplinary integration and consists of experienced technical staff across a wide range of professionally qualified engineers and geologists, who provide geoscience, reservoir, facilities and cost engineering and economic/commercial expertise in conventional and unconventional projects.

Updated Prospective Resources Estimate – Project Phoenix

The Prospective Resource estimate below was prepared by Lee Keeling and Associates (LKA) as of 9 August 2022 and is prior to the drilling of Hickory-1,and is an update from the prospective resource estimate announced on 23 August 2022 with respect to the BFF reservoir only. NSAI has not conducted a review in relation to the prospective resources reported below. The Prospective Resource estimate associated with 88 Energy’s Project Phoenix acreage (~75% net working interest) has been updated to reflect the reclassification of the BFF from Prospective Resource to Contingent Resource as of 1 November 2023, with remaining Prospective Resources summarised below.

 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. Prospective Resource Estimates – determined pre-drilling of Hickory-1.

7. Updated Prospective Resource Estimates reflect the removal of the resource estimate for the Basin Floor Fan which as of 1 November 2023 has been redetermined and classified as a Contingent Resource. No other changes have been made to the original estimates, please refer to the ASX announcement of 23 August 2023.

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.

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