Large Discoveries Confirmed at 88 Energy’s Charlie-1 Well, Near Term Drilling of Billion Barrel Plus Prospect on Newly Acquired Acreage

Summary

• 88 Energy Limited has reported continued and significant progress across its project portfolio during 2020.
• Large oil discoveries were confirmed in the Seabee formation as well as a condensate discovery in the Torok formation at the Charlie-1 exploration well.
• 88E’s off-market takeover of XCD Energy is now complete, and preparations are underway for drilling at the newly acquired acreage on a billion-barrel plus target with spud date scheduled for late February 2021, only six months from now.
• Discussions with nearby resource owners continued for enhancing the monetisation strategy of the Yukon Acreage and permitting is presently in progress.
• 88E expects positive news flow in near term regarding the updated resources at Icewine, farm-out of Peregrine, rig contracts as well as drilling at Project Peregrine

Oil and gas exploration company, 88 Energy Limited (ASX:88E) has been actively engaged in undertaking a number of significant activities during 2020 at its Project Icewine, Yukon Acreage as well as an off-market Takeover Bid for XCD Energy Limited.

One of the most significant developments for the Company was the Off-market Takeover Bid for XCD Energy Limited, wherein 88E concluded the process of compulsory acquisition of remaining shares and listed options in XCD up to 90% of acceptances in the Offers on 17 August 2020.

Source: ASX Announcement 03 September 2020

This transaction shall help in shaping an Alaska-focused oil exploration and appraisal company in consisting a diversified portfolio of three highly prolific project areas, namely, Project Icewine, Yukon Leases and Project Peregrine.

Highlights From Half-yearly Progress: 88 Energy Announces Significant Progress In Half Year 2020, On Track To Acquire Remaining Shares And Listed Options In XCD Energy

Importantly, the merger further offers an attractive investment proposition for existing as well as new shareholders.

The post-merger entity is steered by the leadership and technical team that has a proven capability and track record. Furthermore, there lies a significant opportunity for the Company in terms of scale expansion, market presence, funding capability and share trading liquidity.

Petrophysical Interpretation Confirms Occurrence of Large Oil Discoveries at Charlie-1

88E which started with initial petrophysical interpretation during first half of 2020 at Seabee Formation indicated hydrocarbon pay with additional in-depth analysis ongoing. Interestingly, the Company has received results from the final third party petrophysical interpretation in the Charlie-1 well using sophisticated Laminated Sand Analysis. Opportunistically, Lima discoveries in the Seabee Formation shows the largest contribution in the final interpretation with a significant increase in net pay, compared to the initial interpretation.

Excellent match between petrophysical interpretation and actual measurements (Source: ASX Announcement Dated: 11/09/2020)

The impressive results have confirmed the occurrence of large oil discoveries at both Upper and Lower Lima. A more significant observation is that these targets are relatively shallow and the most extensive of all of the Icewine conventional horizons, in comparison to the Torok Formation.

Related: 88 Energy’s Alaskan Subsidiary Progresses with Charlie-1 Drilling Preparation

Presence Of Oil In Core Taken From Upper Lima (Source: ASX Announcement Dated: 11/09/2020)

In addition to this, the Charlie-1 appraisal well, as already updated earlier by the Company, demonstrated existence of mobile hydrocarbons, in the form of condensate gas, in the Torok Formation in both Lower and Middle Steller targets. Hydrocarbon discoveries with good quality liquid hydrocarbon content have been observed at the Stellar targets in the Torok Formation.

Another prospective target, Kuparuk, is believed to contain anomalously good reservoir quality for its depth. However, this horizon has not undergone any mapping and is believed to be more gas prone than the Torok Formation.

The Company believes that results from the Seabee are outstanding despite not being optimally located and the final interpretation at the Charlie-1 well is a strong vindication of the Company’s efforts. Going forward, 88E looks forward to concluding the evaluation of the Seabee oil discoveries.

Moreover, 88E looks forward to integrating final petrophysical numbers into the updated seismic inversion and subsequently estimate the extent of the accumulations which shall yield updated volumetrics for its resources in the coming weeks.

Interesting Read: 88 Energy Limited Takes The Project Icewine To The Next Stage

Upcoming Drilling At Project Peregrin

In tandem, 88E continues to progress at newly acquired Project Peregrine on both the farm-out as well as permitting/planning fronts.

Previously, 88E reached an agreement with the overriding royalty interest owners to reduce royalty from 1.5% to 1.3% across an expanded area of mutual interest (AMI). Moreover, the completion of the review of the risking post Harpoon drilling by ERC Equipoise has increased the chance of success (COS) for both the Merlin and Harrier Prospects at Project Peregrine.

Moving ahead, 88E looks forward to undertaking a drilling program at Project Peregrin and providing further related information in due course.

Upgradation Of The Cascade Prospect

Another notable development for 88E was the upgradation of the Cascade Prospect at the Yukon Leases from a lead to a drillable prospect subsequent to final processing and interpretation of 3D seismic (2018) over Cascade.

At present, work related to permitting is well underway for the Cascade Prospect and ahead of the prospective drilling in 2021, subject to farm-out.

Moreover, 88E is in discussion with the nearby resource owners for enhancing the monetisation strategy of the Yukon Acreage and permitting is presently in progress.

Related: 88 Energy Scores Big With Its Multiple World Class Assets In Alaskan North Slope

High Vitrinite Reflectance Value Confirmed At HRZ Shale

Furthermore, the HRZ shale at the Charlie-1 location is confirmed to have a vitrinite reflectance value of 0.9 (VRo%), which is within the range of peak oil generation. This validation comes from the measurements taken from both core and cuttings. 88E believes that the affirmation of ideal thermal maturity is outstanding for the HRZ shale and shall lay the foundation for additional work for progressively unlocking its large potential.

Interestingly, the Company anticipates positive news flow in near term regarding the updated resources at Icewine, farm-out of Peregrine, rig contracts as well as drilling at Project Peregrine.

On 11 September 2020, 88E share price is trading at A$0.007, up by 16.67%, (AEST: 11:04 am) with a market capitalisation of $53.61 million.

All financials are in AUD, unless specified.