88 Energy Limited (ASX: 88E) (“88 Energy” or the “Company”) provides the following update related to its operations, located on the North Slope of Alaska.
Definitive Agreements Executed for Farm-in to Western Blocks
Western Blocks – Definitive Agreements Executed
88E, via its 100% owned subsidiary Captivate Energy Alaska, Inc, has executed definitive agreements with Great Bear Petroleum Ventures II LLC (“Great Bear”), along with Otto Energy Ltd (Borealis) and Red Emperor Resources NL (together with 88 Energy, the “Consortium Partners”), to acquire the majority of Great Bear's working interest in the four leases comprising the Western Blocks (ADL 391718; ADL 391719; ADL 391720; ADL 391721) in exchange for drilling a commitment well on the Western Blocks prior to 30 May 2019.
The Western Blocks contain a 3D seismic defined oil prospect in the successful Nanushuk play fairway with a gross mean unrisked prospective resource of 400MMbbls (144MMbbls net to 88E) and a geological chance of success in the range of 25-30%.
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 moveable hydrocarbons.
In accordance with the terms of the definitive agreement, the Consortium Partners have funded their share of a US$3,000,000 performance bond to the State of Alaska and a US$500,000 cash payment to Great Bear as part of the consideration for the acquisition of the working interests in the Western Blocks.
The details of the working interests are described in the below table:
Current Working Interest
Working Interest (before back-in)
Paying Interest (before back-in)
Net Revenue Interest* (before back-in)
Working Interest (after back-in)
Great Bear Petroleum**
State of Alaska
For further details related to the transaction, please refer to the announcement dated 25th June 2018.
Internal interpretation by 88 Energy of 3D seismic over the Western Blocks has confirmed the original interpretation by Otto's technical team, who identified the 400 million barrel prospect (144 million barrels net to 88E). A location to optimally test the prospect has been selected and permitting is underway, ahead of scheduled drilling in 1Q2019.
Project Icewine: Farm-out Dataroom Formally Opened
The dataroom related to farm-out of both the conventional and unconventional prospectivity at Project Icewine has now been formally opened. 88 Energy and its Joint Venture Partner, Burgundy Xploration LLC (“BEX”), are aiming to complete a farm-out prior to year-end that will result in significant expenditure over Project Icewine to continue evaluation of the large conventional and unconventional potential identified over the past three years by the Joint Venture.
A conventional portfolio update based on interpretation and mapping of the preliminary Icewine 3D dataset is being finalised and will be released to the market in due course.
Yukon Gold – 3D Seismic Processing
Seismic processing of the Yukon 3D is progressing well, and the Company remains on schedule to deliver an evaluation of the acreage following mapping and interpretation of the 3D dataset in 4Q2018.
Project Icewine – HRZ Evaluation Process
The evaluation process for the HRZ shale, post the recent suspension of the Icewine#2 well, is ongoing and is expected to take several months. Results from this process will be reported as appropriate during this period.
Additional Credit Certificates Granted
On the 24th July, the Company was informed by the Alaska Department of Revenue that it had issued a Credit Certificate to Accumulate Energy Alaska Inc, (100% owned subsidiary of 88 Energy Ltd), for US$5.66m related to CY2017 expenditure. An amount of US$2.83m is available to be cashed out at such time that cash payments are made by the State. The total expected cashable credits owed by the State to 88E is US$20.7m versus debt of US$16.5m. Timing of complete payment by the State remains uncertain but is estimated to be prior to 2019 calendar end.
88 Energy Ltd Managing Director, Dave Wall, commented: “The closing of the Western Blocks transaction is a significant milestone for the Company and its shareholders.
Encouraging progress continues to be made across the expanded portfolio of assets in Alaska and we look forward to providing additional news on these in the near term.”
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