TIDM88E
RNS Number : 2079Q
88 Energy Limited
27 June 2022
This announcement contains inside information
88 Energy Limited
Projects Update: Icewine East & Longhorn
Highlights
-- Licensing agreement signed with SAExploration, Inc. (SAE) for
use of SAE's Franklin Bluffs 3D seismic survey data (FB3D),
covering a significant area over the Project Icewine East
leases.
-- Critically, the FB3D covers an area over the SMD, SFS and BFF
reservoir units, which are interpreted to extend from Pantheon
Resources' (Pantheon) acreage onto Icewine East.
-- Pantheon wells - Alkaid-1, Talitha-A and Theta West-1 - have
flowed 35 to 40 API oil from multiple Brookian reservoirs (see
Pantheon releases of 7 and 21 February 2022), with independent
third-party mapping indicating all of Pantheon's play fairways
extend onto Project Icewine East.
-- Upfront license fee includes, as part of the initial payment, US$1.0M in new 88E shares.
-- 88E to conduct a full interpretation of the FB3D data,
including AVO analysis, to define 'sweet spots' for each play and
determine optimal future exploration and appraisal drilling
locations.
-- Drilling of a new exploration well currently being planned to spud in 2023.
-- Project Longhorn production has increased over 70% since
acquisition, with plans to accelerate the capital development work
program and increase production further given elevated oil
prices.
88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) ( 88 Energy or
the Company ) is pleased to report that it has signed a licensing
agreement with SAE for the use of SAE's FB3D seismic data.
The FB3D seismic data was acquired in 2015 by SAE and covers
approximately 86 square miles, predominantly over the Icewine East
acreage. More importantly, the FB3D extends across an area where
the Shelf Margin Delta ( SMD ), Slope Fan Set ( SFS ) and Basin
Floor Fan ( BFF ) play fairways have been independently mapped (by
Jordan & Pay) on the Icewine East acreage.
The FB3D data will assist the Company through subsequent
analysis and review, including Amplitude-variation-with-offset
analysis ( AVO analysis ) and simultaneous seismic inversion, in
defining 'sweet spots' for each play and hence determine optimal
drilling locations for future exploration and appraisal wells. In
addition, the FB3D will provide key data for potential farm-out
partners to assess as part of their due diligence program.
Project Icewine East
The FB3D seismic data is to be used to further mature the
conventional prospectivity of the Project Icewine East acreage,
where it is anticipated that it can confirm the prospectivity
already identified and mapped on 2D seismic data. Importantly,
future drilling locations in the Icewine East acreage will be
supported by AVO analysis, which is often used as a qualitative
exploration tool. AVO responses can be associated with the presence
of hydrocarbons in good quality reservoirs; an association which
becomes more reliable when calibrated to actual fluid content
(hydrocarbons) and log data from nearby wells. It is also worth
noting the success that Pantheon has had in utilising its 3D data
to locate Alaskan exploration and appraisal wells. 88 Energy is
targeting a similar or better outcome from its use of the FB3D
data.
88 Energy's initial license fee includes US$1.0 million in fully
paid new ordinary shares in 88 Energy (approximately 181 million
shares at an issue price of A$0.008 per share, being the closing
price of 88 Energy shares on the ASX on 24 June 2022).
88 Energy is currently in the process of planning its operations
in 2023 which is expected to include an exploration well to be
drilled in the Icewine East acreage, and at least one flow test
from multiple Brookian reservoirs that have been mapped on the
Icewine East acreage. These are the same reservoirs that nearby
Pantheon wells - Alkaid-1, Talitha-A and Theta West-1 have flowed
35 to 40 API oil.
In addition, the Company is continuing with its planned farm-out
of the Icewine East acreage. The Company is hopeful of achieving a
positive outcome from the farm-out process given the extensive
dataset and track record that significantly de-risks the Icewine
East acreage, including:
-- High quality 2D and 3D seismic datasets, as well as Icewine-1 and Icewine-2 well data;
-- Soon-to-be-completed new independent prospective resource
report, which is anticipated to demonstrate significant resource
volumes that can support a material development;
-- Nearby Brookian wells, Alkaid-1, Talitha-A and Theta West-1,
having flowed 35 to 40 API oil, with all reservoir units
independently mapped onto the Icewine East acreage;
-- Icewine East acreage being strategically located on the
Dalton Highway, with the TAPS pipeline running through the acreage
providing excellent access to infrastructure and services;
-- 88 Energy's excellent track record on delivering exploration
wells on the North Slope, and its clear understanding of
requirements to drill in Alaska;
-- Recent high oil prices renewing investment interest in the sector; and
-- Strong investor support for Pantheon (AIM:PANR, GBP 690M /
AUD 1.2Bn market capitalisation as at 23 June 2022) in the adjacent
acreage, which presents potential material upside for both 88
Energy and also any potential farm-out partners.
The Company anticipates that the farm-out process will continue
over the coming months which will include additional due diligence
on recent data, followed by detailed negotiations with new
potential partners. Execution and completion of a potential
transaction is not guaranteed and remains subject to all final
documentation being agreed and due diligence completed. There is no
guarantee that any negotiations will lead to a binding agreement or
a completed transaction, and the Company may elect to cease
farm-out discussions ahead of any decision to drill a future
exploration well in the Icewine East acreage.
Project Longhorn
88 Energy is pleased to provide a further update on operations
at its recently acquired Project Longhorn conventional oil and gas
production assets in the proven Permian Basin, onshore Texas, U.S.
88 Energy has a circa 73% average net working interest in these
established production assets.
In the period from March to May 2022, the operator of the
Longhorn production assets successfully completed the first three
of seven planned capital-efficient work-overs scheduled after the
completion of the Longhorn acquisition. These work-overs were
completed on time and on budget and have delivered an significant
increase to the total oil and gas production rates of Project
Longhorn.
Production from the Longhorn wells exceeded 650 BOE per day
gross (over 475 BOE per day net, approximately 70% oil) following
completion of the third work-over at the end of May, at initial
production rates. Daily production rates are anticipated to settle
at around 500 BOE per day gross (over 365 BOE per day net, of which
approximately 70% is oil) in July, which represents an overall
output increase of 70% since the completion of the acquisition in
mid-February 2022.
The production increase provides additional direct exposure to
the higher WTI oil and gas price environment and accelerates
payback on both the acquisition of the assets and the capital
investment in the work-overs.
Given the success of the initial three work-overs, as well as
the continued high oil and gas price environment, the joint venture
participants have agreed to accelerate the capital development
program and the completion of the remaining four planned
work-overs. As part of this agreement, 88 Energy has agreed to part
fund its share of the anticipated US$3.5 million (net) in
development capital through the issuance of US$3.0 million in 88
Energy shares (approximately 544 million shares at an issue price
of A$0.008 per share, being the closing price of 88 Energy shares
on the ASX on 24 June 2022) to Lonestar I, LLC ( Lonestar ), to
fund Longhorn's working capital contributions towards the remaining
CY2022 capital development program ( Capital Development Shares
).
Project Longhorn is now scheduled to complete the targeted seven
capital development activities earlier than planned in Q4 2022.
Issuance of New Shares
As a result of the arrangements outlined above, 88 Energy will
issue a total of 725,000,000 new ordinary shares, of which
181,250,000 will be issued to SAE in respect of part payment of the
FB3D ( FB3D Shares ) and 543,750,000 new ordinary shares to
Lonestar ( Capital Development Shares ).
The FB3D Shares and the Capital Development Shares will be
issued at a price of A$0.008 per share (equivalent to approximately
0.45 pence), being the closing price of 88 Energy shares on ASX on
24 June 2022. The FB3D Shares will be held in escrow until the FB3D
dataset has been received. The Capital Development Shares will also
be held in escrow and subject to certain restrictions and will only
be released from escrow following approval by 88 Energy.
Following the issue of the FB3D Shares and the Capital
Development Shares (together, the New Shares ), which rank pari
passu to the existing ordinary shares in the Company, the Company
has a total of 16,610,207,406 ordinary shares in issue, all of
which have voting rights. The figure of 16,610,207,406 ordinary
shares may be used by shareholders as the denominator for the
calculations by which they will determine if they are required to
notify their interest in, or change their interest in, the
Company.
Application has been made for admission of the New Shares to
trading on AIM, which is expected to occur on or around 30 June
2022.
Both Lonestar and SAE have the option to dispose of New Shares
received, subject to certain restrictions under the agreements. Any
proceeds from the disposal of the 88E shares received by Lonestar
are to be held on trust for 88 Energy until the associated invoices
are received and approved by 88 Energy for the capital development
program. A reconciliation process and payment of any outstanding
amounts due (in cash) will occur prior to year-end 2022.
The below graphics can be viewed in the pdf version of this
announcement, which is available on the Company's website
www.88energy.com:
-- Figure 1: The FB3D seismic data covers an area over the
third-party mapped SMD, SFS and BFF play fairways, which 88E
believes is an extension of all PANR prospect play fairways onto
Project Icewine East.
Media and Investor Relations:
88 Energy Ltd
Ashley Gilbert, Managing Director
Tel: +61 8 9485 0990
Email:investor-relations@88energy.com
Finlay Thomson , Investor Relations Tel: +44 7976 248471
Fivemark Partners , Investor and Tel: +61 410 276 744
Media Relations Tel: +61 422 602 720
Andrew Edge / Michael Vaughan
EurozHartleys Ltd Tel: +61 8 9268 2829
Dale Bryan
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, Dr Stephen Staley, who is a
Non-Executive Director of the Company. Dr Staley has more than 35
years' experience in the petroleum industry, is a Fellow of the
Geological Society of London, and a qualified
Geologist/Geophysicist 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. Dr
Staley has reviewed the information and supporting documentation
referred to in this announcement and considers the resource and
reserve 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.
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
UPDMZGZVGVGGZZZ
(END) Dow Jones Newswires
June 27, 2022 02:00 ET (06:00 GMT)
Grafico Azioni 88 Energy (LSE:88E)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni 88 Energy (LSE:88E)
Storico
Da Apr 2023 a Apr 2024
