88 Energy : Final Petrophysics Upgrades Charlie-1 Net Pay

11th September 2020

This announcement contains inside information

88 Energy Limited

Final Petrophysical Interpretation Substantially Upgrades Charlie-1 Net Pay

88 Energy Limited ("88 Energy" or the "Company", ASX:88E, AIM 88E) is pleased to provide the following update related to results from the Charlie-1 appraisal well, on the North Slope of Alaska.

Highlights

• Final petrophysical interpretation, using sophisticated Laminated Sand Analysis, substantially upgrades net hydrocarbon pay in the Charlie-1 well
• Interpretation integrates log data and advanced lab analysis of cores taken during drilling, including excellent liquid hydrocarbon saturations from both Dean Stark and core NMR1
• Increase in pay despite higher cut off values being used to determine pay zones
• Pay zones also high graded vs initial interpretation with lower water saturation / higher oil saturation and better average porosity
• Final petrophysical interpretation will now be integrated into revised mapping of the Seabee and Torok discoveries to determine resource estimates
• Data room for the next Project Icewine farm-out to be opened in the near term
• Thermal maturity of the HRZ shale confirmed as in the peak oil generation window

1Nuclear Magnetic Resonance analysis performed on cores under laboratory conditions

Detail

The final third party petrophysical interpretation from the recently drilled Charlie-1 well are detailed in the table below. These values consider data from logs obtained during drilling using a sophisticated logging suite as well as multiple laboratory analyses of sidewall cores taken from the key horizons in the Charlie-1 well. Encouragingly, the final interpretation provides a significant increase in net pay, compared to the initial interpretation, of 398' (vs 280'), with the largest contribution coming from the Lima discoveries in the Seabee Formation. These improvements are despite using higher cut-offs for both reservoir and net pay.

	PROSPECT/							NET to				PAY to							INITIAL
	DISCOVERY		FORMATION		GROSS		NET	GROSS		PAY		GROSS		POROSITY	WATER		INTERPRETATION
																(PHIT)		(SWT)
					ft		ft		%		ft		%			avg %		avg %
	UPPER		SEABEE	482	260	54	157	33		12.2	43		Net Pay: 8ft
				PHIT: 11.5%
	LIMA
																			SWT: 77%
	LOWER																			Net Pay: 64ft
		SEABEE		320		116		36		76		24			11.4		40		PHIT: 11.4%
	LIMA
																			SWT: 66%
	UPPER																			Net Pay: 20ft
		TOROK	330	146	44	62	19		11.6	52		PHIT: 11.4%
	STELLAR
																			SWT: 76%
	MIDDLE																			Net Pay: 95ft
		TOROK		234		101		43		56		24			11.4		43		PHIT: 11.4%
	STELLAR
																			SWT: 69%
	LOWER																			Net Pay: 49ft
		TOROK	100	32	32	22	22		10.7	30		PHIT: 11.1%
	STELLAR
																			SWT: 55%
	KUPARUK																			Net Pay: 44ft
		KUPARUK		73		57		78		25		34			12.3		57		PHIT: 13.8%
	(lead)
																			SWT: 70%
Cut-offs: PHIT>9%; SWT<70%, Vshale<40% (previously: PHIT>=8.5%; SWT<=80%, Vshale<=40%)

www. 88energy.com	ABN 80 072 964 179
Level 2, 5 Ord Street, West Perth WA 6005	PO Box 1674, West Perth WA 6872 Australia Phone [phone]

Both Upper and Lower Lima are confirmed as large oil discoveries by this interpretation and the lab results. The results are particularly significant as these targets are the most extensive of the Icewine conventional horizons as well as being relatively shallow, by comparison to the Torok Formation. The extent of the accumulations will be estimated over the coming weeks as these final petrophysical numbers are integrated into the updated seismic inversion product.

Similarly, the Stellar targets in the Torok Formation are also confirmed as hydrocarbon discoveries with good liquid hydrocarbon content. There remains some uncertainty about the gas to oil ratio as the liquid hydrocarbon saturations measured from the Charlie-1 cores in the lab imply much lower gas to oil ratio than that observed during the downhole tests, which recovered gas condensate. It is possible that these liquids may be unlocked by stimulation of the reservoir.

The Kuparuk also remains a prospective target, with anomalously good reservoir quality for its depth, however, no mapping has been done for this horizon and it is considered more gas prone than the Torok Formation.

Example of core calibration to final petrophysics

Fig. 1: Photo under white light and UV light displaying strong fluorescence associated with the presence of oil in core taken from Upper Lima

www. 88energy.com

ABN 80 072 964 179

Level 2, 5 Ord Street, West Perth WA 6005

PO Box 1674, West Perth WA 6872 Australia

Phone [phone]

Fig. 2: Core NMR data showing distribution of fluid in the same core from Fig. 1. Note the significant free oil saturation measured in Region 2 of the map

Fig. 3: Excellent match between petrophysical interpretation and actual core measurements

CA

LSA

www. 88energy.com

ABN 80 072 964 179

Level 2, 5 Ord Street, West Perth WA 6005

PO Box 1674, West Perth WA 6872 Australia

Phone [phone]

HRZ Thermal Maturity - Peak Oil Generation Window

Measurements taken from both core and cuttings have confirmed that the HRZ shale at the Charlie-1 location has a vitrinite reflectance value of 0.9 (VRo %), which is within the peak oil generation window. This was also confirmed by isotope analysis of mud gases recovered whilst drilling. The confirmation of the thermal maturity model is very encouraging and further work is ongoing regarding producibility of the shale.

Managing Director of 88 Energy, Dave Wall, stated: "The results from the Seabee, despite Charlie-1not being optimally located, are outstanding. Whilst these may appear as a serendipitous by-productof the well, internal analysis prior to drilling had already significantly high graded this formation; however, it was too late to change the objectives/location of the well meaning that work remained largely on the drawing board. This final interpretation is a strong vindication of that internal effort. We are now looking forward to the conclusion of the evaluation of the Seabee oil discoveries as we integrate the petrophysics into the seismic inversion and subsequent mapping, which will ultimately yield updated volumetrics for our resources that will feed into the Icewine farm-outprocess.

Good progress continues to be made at the newly acquired Project Peregrine on both the farm-out and permitting/planning fronts. Additional news related to that will be provided to the market in a separate announcement in the near term.

Finally, the confirmation of the ideal thermal maturity for the HRZ shale is encouraging and will form the basis of further work to continue to unlock its large potential."

Reporting requirements under LR 5.30

The Charlie-1 well is located on the North Slope of Alaska, ADL 393380, where 88 Energy has a 30% working interest (increasing to 75%). The well penetrated sandstones in seven stacked targets and shale in one target. No flow tests were undertaken; however, gas condensate samples were retrieved to surface from the Torok formation at 10,506' and 10,656' using a downhole sampling tool (Ora) run during the wireline operation.

This announcement has been authorised by the Board.

Yours faithfully

Dave Wall

Managing Director

88 Energy Ltd

Media and Investor Relations:
88 Energy Ltd
Dave Wall, Managing Director	Tel: [phone]
	Email:[e-mail]
Finlay Thomson, Investor Relations	Tel: [phone]
Hartleys Ltd
Dale Bryan	Tel: + 61 8 9268 2829
Cenkos Securities	Tel: + 44 131 220 6939
Neil McDonald/Derrick Lee

www. 88energy.com

ABN 80 072 964 179

Level 2, 5 Ord Street, West Perth WA 6005

PO Box 1674, West Perth WA 6872 Australia

Phone [phone]