88 Energy Limited - Quarterly Report
Report on Activities for the Quarter ended
The Directors of
· Acreage Award Finalised for ~173,000 Additional Acres
o 88 Energy Now Holds 210,250
· Icewine#2H Well and Stimulation Design for HRZ in Final Stages
o Landing Zone Narrowed to Two Horizons
· Official Tender Process for Icewine#2H Major Contracts Commenced in
o Several Suitable Rigs have been Identified for Drilling of Icewine#2H
· Well Permitting on Track for Completion Ahead of Scheduled Spud in 1QCY17
· Well Performance Modelling Indicates Potential for Improved Economics
o P50 Resource Mid Case Cost Scenario Breakeven Below
· Integrated Petrophysical Model for Young's and
· 2D Seismic Initial Results from Processing and Interpretation Expected in August
Finalisation of Award of Additional ~173,000 Gross Acres
Processing has been completed for the official award of 172,937 acres successfully bid on in the
Icewine#2H Substantial Progress on All Fronts
The well and stimulation design for Icewine#2H are both in the final stages of completion and are currently being fine-tuned.
In the interim, integration of the latest rock property analysis, including Young's Modulus and
Early observations indicate that the excellent source reservoir rock characteristics in the HRZ and consequent high potential flow rates should significantly improve the break even price for Project Icewine in the success case scenario.
Internal modelling of well performance vs cost scenarios indicates a range of breakeven oil prices from
Operationally, good progress continues to be made with the identification of several suitable rigs for the drilling of Icewine#2H. The official tender process for all major contracts commenced in July. Permitting remains on track for completion well before the scheduled spud date in Q1 2017.
2D Seismic Status
2D seismic extracts purchased from Franklin Bluffs 3D
· Seismic interpretation of the extracted 2D lines in the vicinity of the Icewine#2H well location is anticipated in August.
Icewine 2D seismic acquisition 2016:
· The Icewine 2D seismic data acquired earlier this year by Accumulate Energy comprises a series of regional dip and strike lines spanning the majority of the Project Icewine acreage.
· The 2D dataset is expected to be processed by the end of July, with first look interpretation following in September.
On the 22nd April, the Company announced the completion of a strongly oversubscribed
The ASX Appendix 5B attached to this report contains the Company's cash flow statement for the quarter. The significant elements for the period were:
· exploration and evaluation expenditure of
o Borrowings of
o These borrowings are secured against
· administration and other operating costs
· cash raised via placement
· a net cash inflow of
At the end of the quarter, the Company had net cash reserves of
Media and Investor Relations:
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+61 8 9485 0990
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As Corporate Advisor
+61 8 9268 2829
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Cenkos Securities Plc
As Nominated Adviser
Tel: +44 (0)131 220 9771 / +44 (0)207 397 1953
Tel: +44 (0)131 220 9100 / +44 (0)207 397 8900
Project Icewine Highlights
The Project is located on an all year operational access road with both conventional and unconventional oil potential. The primary term for the State leases is 10 years with no mandatory relinquishment and a low 16.5% royalty.
The HRZ liquids-rich resource play has been successfully evaluated based on core obtained in the recently completed (
Cautionary Statement: The estimated quantities of petroleum that may be potentially recovered by the application of a future development project relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration, appraisal and evaluation are required to determine the existence of a significant quantity of potentially movable hydrocarbons.
Generous exploration incentives are provided by the
The primary objective is an untested, unconventional liquids-rich shale play in a prolific source rock, the HRZ shale (Brookian Sequence), that co-sourced the largest oil field in
Conventional play potential can be found at Project Icewine within the same Brookian petroleum system and shallow to the HRZ shale and includes high porosity channel and deep water turbiditic sands. The Brookian conventional play is proven on the
Drilling in (2012), on the adjacent acreage to the north, confirmed that the HRZ shales, along with the underlying Kingak & Shublik shales, were all within the oil window which is extremely encouraging for the unconventional potential at Project Icewine. In addition, a conventional oil discovery was reported in the Kuparuk sandstones.
A Prospective Resources Report by
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