Milestone-rich 2023 positions 88 Energy's (ASX: 88E) global oil & gas portfolio for 'a very bright 2024'

Highlights

• 88E has recently concluded a capital raise of AU$9.9 million and the proceeds will be directed towards the Hickory-1 well flow test.
• Formal farm-out program at Project Leonis is planned in 1HFY24.
• 2D seismic program from Namibia is scheduled to be conducted in 2HFY24.
• Recently, a three-stage farm-in agreement was executed for up to 45% interest in PEL 93 within the Owambo Basin.

2023 has been a busy year for 88 Energy Limited (ASX: 88E). Despite challenging financial market and changing international energy landscape, the company achieved multiple milestones during the year bringing in significant growth in quality, scale, and diversity of opportunities within the oil and gas portfolio.

Recently, the company completed a capital raise of AU$9.9 million.

In this article, the events planned for 2024, and the progress made across Alaskan North Slope, Namibia Frontier exploration and Project Longhorn in full year 2023 will be discussed.

Significant progress across Alaskan exploration

Hickory-1 exploration well underpinned 88E’s activities on the Alaskan North Slope, which is at present cased and suspended ahead of the flow testing which is due to begin in February 2024. The Hickory-1 well aimed at appraising up to six conventional reservoir targets with the oil potential of multi-million barrel.

The company reported positive results from the Hickory-1 drilling and logging program, with oil sows and net log pay calculated across all primary and secondary reservoirs. Furthermore, an upper slope fan system (Upper SFS) reservoir was discovered which was not tested previously by any wells on the Project Pheonix acreage nor the nearby Pantheon Resources acreage to the north.

Recent mapping of the Upper SFS projected a reservoir zone which is more laterally extensive than previous considerations. In a statement, 88E highlighted that Upper SFS had the best oil shows across all reservoirs intersected at Hickory-1 well.

The company also  released a certified independent contingent resource estimate for the Project Phoenix from the Basin Floor Fan (BFF). BFF is the deepest reservoir encountered in Hickory-1. With this development, Hickory-1 well can be classed as a “discovery”. Moreover, it bodes well for the Slope Fan System (SFS) and Shelf Margin Delta (SMD) reservoirs, where the company would focus its efforts in the upcoming flow test operations.

For the flow test operations, the permits are on track and for completion of the activities, All American Oilfield’s upgraded Rig 111 module has been secured. The flow test program got fully funded after the completion of November placement, and it is expected to commence in February 2024.

At Project Leonis, the reprocessing and interpretation of 3D seismic data and review of regional well data had progressed and extended further support for resource potential in the Upper Schrader Bluff (USB). The company plans to conduct a farm-out program in 1H24 and it has received in-bound farm-in interest from several parties.

At Project Peregrine, new N12 and N13 prospects have been identified in the prolific Nanushuk Formation through further technical and exploration analysis. The assessment showed that maximum three independent prospects could be analysed from a single ice pad via a sidetrack from the Harrier-1 well pad, leading to lower exploration costs.

Events expected in 2024

In 2024, the company is expecting several high impact events, which will drive the value growth throughout the year.

In March 2024, Hickory-1 flow test results are likley to be announced, which the company expects to be the first of 88E’s wells to flow oil to surface.

Certified Resource Estimate will be completed at Project Leonis, before the initiation of a formal farm-out program in the first half of 2024 in anticipation of a well in 2025/26.

In the second half of 2024, the 2D seismic program from Namibia is anticipated. The aim of the program is to validate structural closures interpreted from airborne gravity and magnetic data, the results of which will be utilised to define potential drilling locations and get a certified prospective resource estimate.

At Project Longhorn, the company is targeting five well work-over program set to boost cash flows and production over the course of the year.

Expansion and diversification of Namibia Frontier exploration

The company executed a three-stage farm-in agreement in November 2023 for up to 45% interest in the onshore Petroleum Exploration Licence (PEL 93) within the Owambo Basin in Namibia, covering 18,500km². The agreement offers exposure to a first-class operating jurisdiction, with a competitive petroleum regime. The company intends to commence exploration activities next year, with the aim to deliver low-impact 2D seismic over nearly 200 line-kms.

Production protentional of Project Longhorn

Through operations at Project Longhorn, 136,000 BOE production was achieved. Longhorn is a producing asset of 88E; therefore, it makes an important component of its diversified portfolio.

To expand its holdings across the region, in July 2023, the company acquired further interest in new leases which lie four miles from the existing assets at nearly 45% net working interest. In December, around 64% net working interest was acquired in 1,262 net acres less than one mile north and one mile south of this project.

The company is planning to further expand its holding in Texas Basin, along with other exploration in Namibia and Alaska.