REG - 88 Energy Limited - 2D Seismic Contract Awarded for Namibian PEL 93

88 EnergyAnnouncement

10/05/2024 07:00

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RNS Number : 8667N  88 Energy Limited  10 May 2024

This announcement contains inside information

10 May 2024

 

88 Energy Limited

2D SEISMIC CONTRACT AWARDED FOR NAMIBIAN PEL 93 EXPLORATION PROGRAM

Highlights

·   2D seismic acquisition program for Petroleum Exploration Licence 93
(PEL 93 or Licence) awarded to Polaris Natural Resources Development Ltd
(Polaris).

·   Seismic program already paid for by 88 Energy as part of the farm-in
agreement with Monitor Exploration (Namibia) Pty Ltd (Monitor) to earn its
initial 20% working interest in PEL 93.

·   Program to acquire a minimum of ~200-line km of 2D seismic, with data
acquisition to commence mid-2024.

·   Data to be used to validate 10 independent structural closures
identified from airborne geophysical methods (and part existing 2D seismic),
in pursuit of a maiden prospective resource declaration.

·   PEL 93 is a vast 18,500km(2) onshore acreage position comprising blocks
1717 and 1817 in the Owambo Basin, Namibia; 88 Energy can earn up to a 45%
non-operated interest via farm-in.

·   Considerable potential for more leads to be identified as dataset is
expanded.

·   Targeting fast-tracking of drilling with the first potential
exploration well as early as 2H 2025.

·   Nearby operator is drilling 3 to 4 wells in the Owambo basin and is
expected to spud the first well in mid-2024.This represents a significant
catalyst for understanding of the onshore resource potential in Namibia, which
already holds a ready path to market.

 

 

 

88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or the Company) is
pleased to announce the awarding of the 2D seismic data acquisition program
for PEL 93 to Polaris. This program is set to acquire a minimum of ~200-line
km of low-impact 2D seismic.

88 Energy, through its wholly-owned Namibian subsidiary, holds a 20% working
interest in PEL 93, which covers 18,500km(2) of underexplored sub-surface
within the Owambo Basin in Namibia. The Company can earn up to a 45%
non-operated working interest in PEL 93 via its existing three-stage farm-in
agreement.

 

Following a period of planning, public consultation, and receipt of relevant
approvals, the program is expected to commence mid-2024. It will focus on
confirming the structural closures of the 10 independent leads identified from
airborne geophysical methods and partly verified using existing 2D seismic
coverage.

 

The 2D seismic program is expected to be completed in Q3 2024, with processing
of the data anticipated to be completed in Q4 2024. Results from the 2D
seismic program will then be incorporated into existing historical exploration
data over the acreage and used to identify possible exploration drilling
locations.

 

Subsurface investigations completed to date on PEL 93 by Monitor (since its
award in 2018) have incorporated a range of geophysical and geochemical
techniques to assess and validate the significant potential of the acreage.
This included airborne geophysical methods, reprocessing of existing 2D
seismic coverage, as well as measuring methane and ethane concentrations in
soil samples over interpreted structural leads, validating the existence of an
active petroleum system. Passive seismic anomalies from this work were noted
to align closely to both interpreted structural leads and measured alkane
molecules (c1-c5) concentrations in soil.

 

Significant New Structural Play Identified

A series of large, anticlinal structures have been identified in the onshore
Owambo Basin, collectively expected to represent a resource of equivilant size
to recent offshore Namibian discoveries.

Initial exploration in the Owambo Basin has focused on the shallow Karoo Play,
however attention has turned to the substantial potential of the deeper and
largely untested Damara Play.

The Damara Play resulted from a large fold and thrust episode, providing
significant independent targets for exploration of an equivalent size to those
discovered offshore Namibia, where an exploration renaissance is underway with
~88% success rate (with recent wells discovering oil).

Monitor has utilised a range of geophysical and geochemical techniques to
identify and validate the significant potential of the acreage.

 

 

PEL 93, Owambo Basin, Onshore Namibia

 

Damara Play Drilling In 2H 2024

 

Reconnaissance Energy Africa Ltd (ReconAfrica) are planning on drilling and
testing 3 to 4 wells in well-defined prospects within two distinct regional
plays (Karoo and Damara), as part of an initial exploration drilling campaign
in PEL073 and PEL001, located on the flanks of the Owambo basin.

The Damara Play is characterised by several coherent, mappable, large fold and
thrust structures which generated 19 prospects and 4 leads certified by third
party resource auditor, NSAI. The target structures observed are up to 25km in
length and 3 to 5km wide. Reservoirs are expected to be encountered in both
the marine/fluvial sandstones of the Mulden formation as well as the fractured
carbonates of the Otavi Supergroup. The Otavi group was penetrated in well 6-2
and contained oil shows on mud logs as well as oil saturations in side-wall
cores.

The Pre-Rift Karoo play interval is interpreted to be late Neo-Proterozoic to
Early Palaeozoic sedimentary rocks which are analogous to the sediments of the
Owambo Basin to the west.

Given their depth, modelled maturation, geological age and geochemical data
from wells and seeps, the hydrocarbons are expected to be both light oil and
gas.

 1  From ReconAfrica announcement dated 14 March 2024 on the TSX - NSAI
Prospective resource Estimates

 

About Polaris

Polaris provides comprehensive project design and management, state-of-the-art
technologies, and a highly experienced team of seismic professionals. Polaris
provides a start to finish solution using 'Best in Class' procedures and
standards, and has contributed to many world-class discoveries with over 1,000
projects completed on four continents since 1996.

 

Polaris has succesfully completed 2D seimsic acquitiion programs regionally
for Invictus Energy (ASX:IVZ) in Zimbawe and also for Reconnaissance Energy
Africa Ltd (TSX:RECO) in Namibia.

 

Polaris are set to mobilise staff and equipment ahead of program commencement
in late Q2 2024.

 

Background; Farm-In Agreement

The Farm-In Agreement was executed on 14 November 2023, between Eighty Eight
Energy (Namibia) (Pty) Ltd (88EN), a newly formed, wholly-owned subsidiary of
88 Energy, and private Namibian company, Monitor Oil and Gas Exploration
(Namibia) Pty Ltd (MELN), a wholly-owned subsidiary of Monitor. Following the
WI Transfer, 88EN now holds a 20% working interest in the Licence, MELN
retains a 55% working interest and acts as Operator of the exploration and
development of PEL 93. Private Namibian company, Legend Oil Namibia (Pty) Ltd
(Legend) holds a 15% working interest and Namibian government entity, National
Petroleum Corporation of Namibia (Pty) Ltd (NAMCOR), holds a 10% working
interest in the Licence. Under the terms of the Farm-In Agreement, 88EN is,
together with the other three working interest owners, party to a new Joint
Operating Agreement (JoA) in relation to the Licence.

88EN may earn up to a total 45% working interest in PEL 93 by funding its
share of agreed costs under the 2024 work program and budget as defined in the
Farm-In Agreement and any future work program budgets yet to be agreed. The
maximum total investment costs are anticipated to be US$18.7 million.

The current and potential future PEL 93 Joint Venture partners and working
interests are as follows:

 Entity     Pre Farm-in  Stage 1 - Current       Stage 2        Stage 3

                         (Past costs & 2D)       (1(st) Well)   (2(nd) Well)
 Monitor*   75.0%        55.0%                   37.5%          30.0%
 Legend     15.0%        15.0%                   15.0%          15.0%
 NAMCOR     10.0%        10.0%                   10.0%          10.0%
 88 Energy  -            20.0%                   37.5%          45.0%

        *Operator

 

Stage 1 Completed schedule to earn a 20% working interest in the Licence
comprised:

§ 1(st) instalment: US$0.28 million cash on signing for partial payment of
back costs (Completed);

§ 2(nd) instalment: US$1.25 million paid in 88 Energy shares on signing for
part payment of the 2D seismic carry (Completed);

§ 3(rd) instalment: US$1.25 million paid in 88 Energy shares upon approval of
the Licence WI Transfer by the Namibian government, as a further payment in
relation to the 2D seismic program carry (Completed); and

§ 4(th) Instalment: US$0.92 million paid in 88 Energy shares for remaining
payment of back costs and 2024 work-program carry (Completed).

 

This announcement has been authorised by the Board.

 

Media and Investor Relations

 

 88 Energy Ltd

 Ashley Gilbert, Managing Director

 Tel: +61 (0)8 9485 0990

 Email:investor-relations@88energy.com

 Fivemark Partners, Investor and Media Relations

 Michael Vaughan                                  Tel: +61 (0)422 602 720

 EurozHartleys Ltd
 Dale Bryan                                       Tel: +61 (0)8 9268 2829

 Cavendish Capital Markets Limited                Tel: +44 (0)207 220 0500
 Derrick Lee                                      Tel: +44 (0)131 220 6939
 Pearl Kellie                                     Tel: +44 (0)131 220 9775

 

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