TIDM88E
RNS Number : 8914W
88 Energy Limited
23 August 2022
23 August 2022
88 Energy Limited
Project Icewine East Prospective Resource Estimate
88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) ( 88 Energy or
the Company ) in compliance with ASX Listing Rules provides the
following update in relation to the Prospective Resource estimate
for Project Icewine East, as previously announced by 88 Energy on
10 August 2022 ("Icewine East Update"). Please refer to the Icewine
East Update for information on Project Icewine East Prospective
Resource estimates.
Following the Icewine East Update, 88 Energy now has two
separate independent Prospective resource estimates for Project
Icewine, as follows;
-- Project Icewine East: prepared by Lee Keeling and Associates; and
-- Project Icewine West: prepared by ERCE Equipoise Pte Ltd
which was announced by the Company on 10 November 2020 ("Icewine
West Update"). Please refer to the Icewine West Update for further
details on the resource estimates for Project Icewine West.
The two independent prospective resource estimates cover
separate and independently mapped resources.
Prospective Resources Estimate - Icewine East
The assessed maiden gross and net Prospective Resource estimates
associated with 88 Energy's Icewine East acreage (75% net working
interest) are summarised below.
Icewine East: Alaska North Unrisked Gross Prospective Oil Resources
Slope (MMstb) (4,5)
Prospects (Probabilistic Low (1U) Best (2U) High (3U) Mean COS
Method) (3)
----------
Shelf Margin Delta (SMD A,
B & C) 70 224 518 231 81%
========== ========== ========== ====== =====
Slope Fan Set (SFS) 37 134 345 141 50%
============================ ========== ========== ========== ====== =====
Basin Floor Fan (BFF) 119 543 1,480 569 50%
============================ ========== ========== ========== ====== =====
Kuparuk (KUP) 39 88 156 89 72%
============================ ========== ========== ========== ====== =====
1,030
Prospects Total 265 988 2,499 (2)
---------------------------- ---------- ---------- ---------- ------ -----
Icewine East: Alaska North Unrisked Net Entitlement to 88E (1) Prospective
Slope Oil Resources (MMstb) (4,5)
Prospects (Probabilistic Low (1U) Best (2U) High (3U) Mean COS
Method) (3)
-----------
Shelf Margin Delta (SMD A,
B & C) 44 140 326 145 81%
=========== ============ =========== ========= =====
Slope Fan Set (SFS) 24 84 217 89 50%
============================ =========== ============ =========== ========= =====
Basin Floor Fan (BFF) 75 341 930 358 50%
============================ =========== ============ =========== ========= =====
Kuparuk (KUP) 24 56 98 56 72%
============================ =========== ============ =========== ========= =====
Prospects Total 167 621 1,570 647 (2)
---------------------------- ----------- ------------ ----------- --------- -----
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.
Cautionary Statement: The estimated quantities of petroleum that
may potentially be recovered by the application of a future
development project(s) relate to undiscovered accumulations. These
estimates have both an associated risk of discovery and a risk of
development. Further exploration appraisal and evaluation is
required to determine the existence of a significant quantity of
potentially recoverable hydrocarbons.
The data used to compile the independent prospective resource
report includes reprocessed 2D seismic data, basin modelling,
petrophysical analysis of publicly available wells and historical
geological records. The data was compiled and interpreted by 88E
and was reviewed, validated and in some cases modified
independently by LKA.
LKA's methodology for determining Prospective Resources for
Project Peregrine
LKA has determined Prospective Resources by examining the areas
of consistent bright amplitude that were mapped by independent
consultants to 88E, Jordan and Pay, using the reprocessed 2D
seismic data within the Icewine East area. Parameters including
potential pool area and thickness, porosity, hydrocarbon
saturation, oil expansion and recovery factor were estimated on a
probabilistic low, mid and high basis. The Prospective Resources
distributions were then aggregated into four (4) prospects, on the
basis that one (1) well could effectively test all the mapped
prospective intervals. The unrisked prospective resources estimates
(and associated geological chance of success) were modelled using
Monte-Carlo analysis on the assumption there was no economic
minimum and that volumes and risks of each of the prospective
intervals within each prospect were independent.
The Prospective Resources have not been adjusted for phase risk
or chance of development. 88 Energy and LKA have considered the
chance of discovering oil over gas to be 100% for all targets
except for the Kuparuk Formation which was assessed to be 70%.
Chance of development has not been estimated.
Please refer to the disclaimers attached as Schedule 1 of this
ASX release for more information on the prospective resource
report.
About LKA
LKA is a U.S. based independently owned petroleum Reserves and
Resources auditor and engineering consultants, providing expert
consultancy services to the upstream oil and gas industry since
1957. LKA technical staff include 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. Examples of
current clients are noted on their website (
https://www.lkaengineers.com/clients/ ) and include independent oil
and gas operators, international, state and federal government
agencies, bank and financial institutions, as well as legal and
accounting firms.
This announcement has been authorised by the Board.
Media and Investor Relations:
88 Energy Ltd
Ashley Gilbert, Managing Director
Tel: +61 8 9485 0990
Email:investor-relations@88energy.com
Fivemark Partners , Investor and Media Relations
Michael Vaughan Tel: +61 422 602 720
EurozHartleys Ltd
Dale Bryan Tel: + 61 8 9268 2829
Cenkos Securities
Neil McDonald / Derrick Lee Tel: + 44 131 220 6939
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.
SCHEDULE 1
Disclaimers:
Cautionary Statement for Prospective Resource Estimates - With
respect to the Prospective Resource estimates contained within this
report, it should be noted that the estimated quantities of gas
that may potentially be recovered by the future application of a
development project relate to undiscovered accumulations. These
estimates have an associated risk of discovery and risk of
development. Further exploration and appraisal is required to
determine the existence of a significant quantity of potentially
moveable hydrocarbons.
Hydrocarbon Resource Estimates - The Prospective Resource
estimates for Project Icewine East presented in this report are
prepared as at 9 August 2022. The Prospective Resource estimates
are quoted on an unrisked basis together with the geological chance
of success for each prospect. The unrisked mean total presented in
the table is not representative of the expected total from the 4
prospects and assumes a success case in all reservoir intervals. 88
Energy and LKA have considered the chance of discovering oil over
gas to be 100% for all targets except for the Kuparuk Formation
which was assessed to be 70%. Chance of development has not been
estimated. Quantifying the chance of development (COD) requires
consideration of both economic contingencies 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.
Government Royalty and Overriding Royalty Interests - The
Project Icewine East leases ("Leases") are situated in the State
Lands of the North Slope of Alaska and are administered by the
Alaskan Department of Natural Resources - Oil and Gas Division
(DNR). All leases issued by DNR are subject to a royalty and 88E's
Leases are subject to a 12.5% government royalty. In addition, the
Leases are subject to an overriding royalty of 4.0% payable to
non-related parties of the Company. The net economic interest to
88E has therefore been calculated as 62.81% and the Net Entitlement
Prospective Resources have been adjusted to reflect this.
Competent Person Statement Information - In this report
information relating to hydrocarbon resource estimates have been
supplied by LKA, and the company has stated in the Report that it
has been prepared in accordance with the definitions and guidelines
set forth in the Petroleum Resources Management System, 2018,
approved by the Society of Petroleum Engineers and have been
prepared using probabilistic methods. Lee Keeling & Associates,
Inc., the independent resource reviewer named in this document, has
consented to the inclusion of information relevant to their review
in the form and context in which it appears. Dr Stephen Staley, who
is a Non-Executive Director of the Company, has more than 37 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 prospective resource 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.
Forward looking statements - This document may include forward
looking statements. Forward looking statements include, are not
necessarily limited to, statements concerning 88E's planned
operation program and other statements that are not historic facts.
When used in this document, the words such as "could", "plan",
"estimate", "expect", "intend", "may", "potential", "should" and
similar expressions are forward looking statements. Although 88E
believes the expectations reflected in these are reasonable, such
statements involve risks and uncertainties, and no assurance can be
given that actual results will be consistent with these
forward-looking statements. The entity confirms that it is not
aware of any new information or data that materially affects the
information included in this announcement and that all material
assumptions and technical parameters underpinning this announcement
continue to apply and have not materially changed.
SCHEDULE 2
Definitions and Glossary of Key Terms:
SPE definition: Prospective Resource
Prospective resources are estimated volumes associated with
undiscovered accumulations. These represent quantities of petroleum
which are estimated, as of a given date, to be potentially
recoverable from oil and gas deposits identified on the basis of
indirect evidence but which have not yet been drilled. This class
represents a higher risk than contingent resources since the risk
of discovery is also added. For prospective resources to become
classified as contingent resources, hydrocarbons must be
discovered, the accumulations must be further evaluated and an
estimate of quantities that would be recoverable under appropriate
development project(s) prepared.
Glossary of Key Terms
1U Denotes the unrisked low estimate qualifying
as Prospective Resources.
2U Denotes the unrisked best estimate qualifying
as Prospective Resources
-------------------------------------------------
3U Denotes the unrisked high estimate qualifying
as Prospective Resources
-------------------------------------------------
BOE Barrels of oil equivalent
-------------------------------------------------
Bnbbl Billion barrels of oil
-------------------------------------------------
Chance Chance equals 1-risk. Generally synonymous
with likelihood.
-------------------------------------------------
Chance of Development The estimated probability that a known
accumulation, once discovered, will be
commercially developed.
-------------------------------------------------
Entitlement That portion of future production (and
thus resources) legally accruing to an
entity under the terms of the development
and production contract or license.
-------------------------------------------------
Mean The sum of a set of numerical values
divided by the number of values in the
set.
-------------------------------------------------
MMbbl Million barrels of oil
-------------------------------------------------
Prospect A project associated with a potential
accumulation that is sufficiently well
defined to represent a viable drilling
target.
-------------------------------------------------
Prospective Resources Those quantities of petroleum that are
estimated, as of a given date, to be
potentially recoverable from undiscovered
accumulations.
-------------------------------------------------
Reservoir A subsurface rock formation that contains
an individual and separate natural accumulation
of petroleum that is confined by impermeable
barriers, pressure systems, or fluid
regimes (conventional reservoirs), or
is confined by hydraulic fracture barriers
or fluid regimes (unconventional reservoirs).
-------------------------------------------------
Royalty A type of entitlement interest in a resource
that is free and clear of the costs and
expenses of development and production
to the royalty interest owner. A royalty
is commonly retained by a resources owner
(lessor/host) when granting rights to
a producer (lessee/contractor) to develop
and produce that resource. Depending
on the specific terms defining the royalty,
the payment obligation may be expressed
in monetary terms as a portion of the
proceeds of production or as a right
to take a portion of production in-kind.
The royalty terms may also provide the
option to switch between forms of payment
at discretion of the royalty owner
-------------------------------------------------
Working Interest An entity's equity interest in a project
before reduction for royalties or production
share owed to others under the applicable
fiscal terms.
-------------------------------------------------
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END
MSCZZGZRKFRGZZG
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August 23, 2022 02:00 ET (06:00 GMT)
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