88 Energy has provided the following report for the quarter ended 30 September 2024.
Highlights
Project Phoenix (~75% WI)
- Significant Resources Update: New Contingent Resources estimates at Project Phoenix for the SMD-B and SFS reservoirs, independently verified by ERCE Australia Pty Ltd (ERCE) during the quarter. Existing Gross Best Estimate (2C) Contingent Resources increased over 50%, with an additional gross 128 million barrels of oil equivalent (MMBOE), 81MMBOE Net Entitlement to 88E, added from the Shelf Margin Delta (SMD-B) and Slope Fan System (SFS) reservoirs, comprising(1):
- 115 million barrels (MMbbl) of Gross recoverable hydrocarbon liquids (oil and natural-gas liquids), 73 MMbbl Net Entitlement to 88 Energy(1); and
- 68 billion cubic feet (BCF) of Gross recoverable gas, 43 BCF Net Entitlement to 88 Energy(1)
- Strategic Development Opportunity Confirmed: Featuring the critical characteristics required for future commercialisation and monetisation, including:
- A combined Best Estimate (2C) Contingent Resources of Gross 251 MMbbl (159 MMbbl Net to 88E) of oil and natural-gas liquids (NGLs) across four stacked reservoirs, accessible from single surface location(1);
- Premium 37- 40o API gravity oil successfully recovered from Hickory-1, for a highly marketable and valuable light oil product(1); and
- Located on prime Alaskan State lands, directly adjacent to the Trans-Alaskan Pipeline System (TAPS), and the Dalton Highway, with close proximity to Deadhorse (oil and gas services hub);
- Successful outcomes from Hickory-1 delivered a platform for monetisation of Project Phoenix, justifying further advancement. Near-term advancement activities are focused on:
- Initiating a formal farm-out process to attract a strategic partner for future drilling and development of Project Phoenix;
- Planning and design for a potential horizontal flow test and early stage production system;
- 3rd party review by ResFrac of the Hickory-1 stimulation and flow design, modelling production potential and optimising the completion strategy for a potential horizontal well; and
- Constructive Partner Progress: Ongoing discussions with joint venture partner Burgundy Xploration, LLC (Burgundy), could result in Burgundy carrying all or part of 88 Energy's share of the 2025/2026 work program in exchange for an additional working interest in the Project.
- Refer announcement released to ASX on 18 September 2024 for full details.
88E is not aware of any new information or data that materially affects the information included in the relevant market announcement and that all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed.
Project Leonis (100% WI)
- Planning ongoing for the Tiri-1 exploration well, designed to test the Tiri prospect in the USB formation;
- Additional deeper resource potential identified and being assessed within the acreage, including mapping of potential new resource, AVO studies.and resource estimation; and
- Ongoing farm-out process seeking a funding partner ahead of potential Tiri-1 drilling in 2026.
Namibia PEL 93 (20% WI)
- Data processing for the ~200-line km 2D seismic program is ongoing, both in the field and at Earth Signal Processing in Calgary, with final interpretation expected in Q4 2024;
- Program outcomes set to include:
- Validation of up to 10 independent structural closures;
- Delivery of a maiden independently certified Prospective Resource estimate expected in H1 2025; and
- Identification of future potential drilling locations targeting the Damara play.
Project Longhorn (~65% WI)
- Production marginally increased from 391 BOE per day gross (average Q2 2024, ~63% oil) to Q3 2024 average of 395 BOE per day gross (~69% oil). Q3 production was expected to be higher at around 450-460 BOE per day gross but the operations experienced unplanned downtime. This included gas plant downtime resulting in the need to vent gas with higher backpressure and water station battery issues following a lightning strike requiring certain wells to be shut-in for specific periods during the quarter.
- In June 2024, the Company received a cash flow distribution of ~A$0.7M, post final workover expenditure.
Corporate
- Cash balance of A$5.5 million and all Hickory-1 flow test payments made and program closed;
- Burgundy obliged to pay outstanding cash call of ~US$4 million in Q4 2024, which will further strengthen the balance sheet;
- Budget for the forward twelve-month activity schedule fully funded for delivery, including Phoenix horizontal well pre-planning / permitting and farmout activities, Leonis Tiri-1 planning and farmout activites, PEL93 work program and Longhorn operations; and
- Lower Corporate costs for the 9 months in 2024 of $2.7M compared to 9 months in 2023 of $4m (over a 30% reduction YTD).
Click here for full announcement
Source: 88 Energy
