88 Energy : Half Yearly Accounts9 August 2022

ABN 80 072 964 179

HALF-YEAR FINANCIAL REPORT

30 JUNE 2022

CONTENTS

	PAGE
CORPORATE INFORMATION	3
DIRECTORS' REPORT	4
AUDITORS' INDEPENDENCE DECLARATION	12
CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OTHER COMPREHENSIVE INCOME	13
CONSOLIDATED STATEMENT OF FINANCIAL POSITION	14
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	15
CONSOLIDATED STATEMENT OF CASH FLOWS	16
NOTES TO THE HALF-YEAR FINANCIAL STATEMENTS	17
DIRECTORS' DECLARATION	25
INDEPENDENT AUDITOR'S REVIEW REPORT	26

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CORPORATE INFORMATION

DIRECTORS

Mr Philip Byrne (Non-Executive Chairman)

Mr Ashley Gilbert (Managing Director)

Dr Stephen Staley (Non-Executive Director)

Ms Joanne Kendrick (Non-Executive Director)

COMPANY SECRETARY

Ms Sarah Smith

REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS

Ground Floor, 516 Hay Street Subiaco

WA 6008 Australia

POSTAL ADDRESS

PO Box 352, Subiaco

WA 6904 Australia

AUDITORS

BDO Audit (WA) Pty Ltd

Level 9, Mia Yellagonga Tower 2

5 Spring Street

Perth WA 6000

SHARE REGISTRIES

Computershare

Level 11, 172 St Georges Terrace

Perth WA 6000

Telephone: [phone]

Facsimile: [phone]

Computershare Investor Services PLC

The Pavilions

Bridgwater Road

Bristol BS99 6ZZ

United Kingdom

INTERNET ADDRESS

www.88energy.com

SHARE LISTINGS

ASX - 88E

AIM - 88E

OTC - EEENF

COUNTRY OF INCORPORATION AND DOMICILE

Australia

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DIRECTORS' REPORT

Your Directors present their report together with the interim financial report of 88 Energy Limited (the Company or 88 Energy) for the six months ended 30 June 2022 and the independent auditor's review report thereon.

DIRECTORS

The names of the Company's Directors in office during the half-year and until the date of this report are as below. Directors were in office for this entire period unless otherwise stated.

Ms Philip Byrne (Non-executive Chairman, appointed 2 August 2021)

Mr Ashley Gilbert (Managing Director, appointed 10 May 2021)

Dr Stephen Staley (Non-executive Director, appointed 9 April 2014)

Ms Joanne Kendrick (Non-executive Director, appointed 2 August 2021)

OPERATING AND FINANCIAL REVIEW

During the period, the Group has continued its principal exploration activities in Alaska and in February 2022 acquired a ~73% non - operated working interest in production assets located in the Texas Permian Basin through the 75% investment in Bighorn Energy LLC.

Highlights for the first half of 2022

A summary of significant activities that occurred during the first half of 2022 is below:

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DIRECTORS' REPORT

Project Icewine

88 Energy progressed further studies and analysis across the Icewine East acreage, which included completing the mapping of the Shelf Margin Delta (SMD), Slope Fan Set (SFS) and Basin Floor Fan (BFF) play fairways onto the Project Icewine East acreage. In May 2022, the Company announced that Jordan & Pay completed an independent evaluation of the play fairways, utilising available well information from presentations publicly released by neighbouring project proponent, Pantheon Resources plc (AIM:PANR) (Pantheon). This was coupled with internal Company data (including Icewine-1 and Icewine-2 well logs and existing 2D seismic) and concluded that all Pantheon reservoir units (SMD, SFS, BFF) extended onto the Project Icewine acreage.

Figure 1: Third-party mapping indicates extension of all PANR prospect play fairways into Project Icewine

The Company also commissioned an in-depth petrophysical re-evaluation of Icewine-1 and the broader Icewine East area by independent petrophysical consultants (Stimulation Petrophysics Consulting, LLC and Snowfall Energy LLC). The consultants focussed on assessing Icewine-1 logs against intervals that flowed oil in Pantheon's acreage to the north. Pleasingly, a comparison of the tested interval in Alkaid-1 against a similar interval in Icewine-1 indicated favourable potential for a flow test of the same zone in the Icewine East acreage.

Pantheon's wells - Alkaid-1,Talitha-A and Theta West-1 - all flowed 35 to 40⁰ API oil from multiple Brookian reservoirs. Pantheon's testing has confirmed reservoir deliverability of light, sweet oil (see Pantheon releases of 7 February and 21 February 2022), which 88 Energy believes is positive for the prospectivity of the adjacent Project Icewine acreage. Data from the Talitha-A and Theta West-1 wells are not yet publicly available and as a result, only a qualitative comparison of these logs against Icewine-1 logs have been carried out to date.

Given the favourable petrophysical comparison between Icewine-1 and Alkaid-1, the Company is optimistic that a production test in the Icewine East acreage could potentially yield a similar or better result than seen during the testing of Alkaid-1. The Company also notes Pantheon's announcement of 7 July 2022 that it has spudded a horizontal production well in Alkaid, named Alkaid#2, to prove up the development concept (see also Pantheon release of 24 January 2022 and Figure 2 below).

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