88 Energy : Quarterly Activities Report & Cashflow13 July 2022

ASX ANNOUNCEMENT

QUARTERLY ACTIVITIES REPORT

For the quarter ended 30 June 2022

88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or the Company) provides the following report for the quarter ended 30 June 2022.

Highlights

Project Icewine (~75% WI)

• Icewine East third-party evaluation of the Shelf Margin Delta (SMD), Slope Fan Set (SFS) and Basin Floor Fan (BFF) play fairways was completed in May 2022, which interpreted all of Pantheon reservoir units (SMD, SFS, BFF) to extend onto 88 Energy's Icewine East acreage.
• Completed in-depth petrophysical re-evaluation of Icewine-1 and the broader Icewine East acreage, with results indicating comparable, or better, reservoir quality in some reservoir units relative to those of Pantheon's tested intervals which flowed oil.
• Licensing agreement executed with SAExploration, Inc. (SAE) for use of SAE's Franklin Bluffs 3D seismic survey data (FB3D), covering a significant area over the Icewine East leases, inculding areas over the SMD, SFS and BFF reservoir units.
• Completion of independent resource report ongoing, scheduled in early Q3 2022.
• Planning underway for a new exploration well expected to spud in 2023.

Project Peregrine (100% WI)

• Ongoing Merlin-2 post well studies to assess future exploration potential.
• Multiple independent drill ready targets remain untested (Harrier-1 & Merlin-1A).
• Merlin-2demobilisation completed in April and majority of invoices paid before quarter end.

Project Longhorn (~73% WI)

• Production (~70% oil) has increased over 70% since acquisition in mid-February 2022
• Successful completion of two work-overs, with three of seven planned for 2022 now completed.
• Quarterly cash flow distribution of A$1.3M received in June 2022.

Umiat Oil Field (100% WI)

• Studies commenced with an Alaskan drilling operator regarding use of a new light-weight rig and optimised operations to drill a cost effective exploration well designed to unlock further upside in Umiat Unit.

Corporate

• Cash of A$10.5M and no debt (as at 30 June 2022).

www.88energy.com		ABN 80 072 964 179
Ground Floor, 516 Hay Street, Subiaco WA 6008	PO Box 352, Subiaco WA 6904 Australia	Phone [phone]

QUARTERLY REPORT

For the period ended 30 June 2022

Project Icewine (~75% WI)

During the quarter, 88 Energy progressed further studies and analysis across the Icewine East acreage, which included completing the mapping of the SMD, SFS and BFF play fairways onto the Project Icewine East acreage. In May, 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

Also during the quarter, the Company 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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QUARTERLY REPORT

For the period ended 30 June 2022

At the end of June, the Company signed a licensing agreement with SAE for the use of SAE's Franklin Bluffs 3D seismic survey data (FB3D). The FB3D seismic data was acquired in 2015 by SAE and covers approximately 86 square miles, predominantly over the Icewine East acreage. More importantly, the FB3D extends across an area where the SMD, SFS and BFF play fairways have been independently mapped on the Icewine East acreage.

The FB3D data will assist the Company with carrying out its forthcoming analysis, including Amplitude-variation-with-offset analysis (AVO analysis) and simultaneous seismic inversion. These studies will aid the Company in defining 'sweet spots' for each play and determining optimal drilling locations for future exploration and appraisal wells.

Figure 2: The FB3D seismic data covers an area over the third-party mapped SMD, SFS and BFF play fairways, which 88 Energy believes is an extension of all Pantheon's prospect play fairways onto Icewine East

88 Energy's initial license fee included US$2.0 in cash and US$1.0 million in fully paid new ordinary shares in 88 Energy (approximately 181 million shares at an issue price of A$0.008 per share, being the closing price of 88 Energy shares on the ASX on 24 June 2022).

Other activities that the Company undertook in Q2 2022 included:

• Progressing the maiden Project Icewine East prospective resource estimate, scheduled for completion early Q3 2022.
• Planning operations for 2023, which are targeted to include an exploration well to be drilled in the Icewine East acreage, and at least one flow test from the multiple Brookian reservoirs that have been mapped on the Icewine East acreage. These are the same reservoirs that nearby Pantheon wells - Alkaid-1,Talitha-A and Theta West-1 - have flowed 35⁰ to 40⁰ API oil.

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QUARTERLY REPORT

For the period ended 30 June 2022

Project Peregrine (100% WI)

The Merlin-2 well was designed to appraise the N20, N19 and N18 horizons which were encountered in the Merlin-1 well drilled in 2021. The well was spudded on 7th Match 2022 and reached Total Depth (TD) of 7,334 feet on 22nd March 2022. All three Nanushuk targets (N20, N19 and N18) were penetrated during drilling, with Logging While Drilling (LWD) data and physical cuttings collected throughout the Merlin-2 program. Observations of LWD logs and drill cuttings collected during drilling revealed target intervals were thicker than those encountered in Merlin-1. Plugging, abandonment and demobilisation of the Merlin-2 well was completed in April 2022.

The results of Merlin-2 are largely consistent with the Merlin-1 exploration well drilled in 2021. Strong fluorescence, oil sheen, petroliferous odour and cut noted in the drilling cuttings, elevated C2-C5 mud gas readings over the target zones with total gas significantly above background gas readings and also evidence from the reservoir sampling tool of moveable hydrocarbons.

Both Merlin wells were drilled on sparse, vintage 2D seismic data, which provides a narrow field of view of the reservoir and limited optionality on driling locations. 88 Energy will assess the merits of a future 3D seismic acquisition program or an in-fill 2D program in order to define optimal play fairways and determine the potential commerciality of the Project Peregrine acreage.

The Company has commenced detailed analysis of all data obtained from the Merlin-2 drilling program and will evaluate potential future appraisal activities within the Project Peregrine acreage, which include independent drilling locations such as the Harrier-1 prospect to test the N14 and N15 horizons.

In particular, during the quarter, the Company commenced an independent NPRA basin modelling study to further improve 88 Energy's understanding of the geological history and how it pertains to the Nanushuk reservoir quality across Project Peregrine. Coupled with petrographic studies of Merlin side- wall cores, the modelling will utilise available maximum Brookian uplift / erosion and burial depth data to produce qualitative reservoir risk maps of the Nanushuk Formation which, will help inform how the Project Peregrine reservoir quality varies Northward, away from the Merlin-1 and 2 locations. This study is anticipated to be completed by Q3, 2022.

Yukon Leases (100% WI)

The Yukon Leases contain the 82 million barrel1 Cascade Prospect, which was intersected peripherally by Yukon Gold- 1 and classified as a historic oil discovery. The Company continues to complete due diligence and commercial assessment of a joint development with near-by resource owners.

Figure 3: remaining Yukon acreage retained on State lands after relinquishment of Tract 29 in ANWR. Tract 29 relinquished in Q2 2022 given ongoing restrictions and inability to explore in lease

• uncertainty when drilling could occur - all fees were refunded to 88 Energy.
  .

1. Refer to 88 Energy release dated 7th November 2018. Note cautionary statement on page 6.

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QUARTERLY REPORT

For the period ended 30 June 2022

Umiat Oil Field (100% WI)

In Q1 2021, 88 Energy acquired the Umiat Oil Field. As part of the acquisition, the Company received the Umiat data pack which includes Umiat 3D seismic data. The Umiat 3D survey abuts the southern edge of the Project Peregrine lease blocks. Integrating the Linc/Malamute seismic interpretation has provided a better understanding of the Peregrine reservoir geometries to the north as well as enriching the Company's petrophysical database with additional well control (Umiat-8 and Umiat-23H).

Solid, green - proved oil accumulation

Striped, green - undrilled potential

Figure 4: Conceptual 3D model of Umiat Structure

Internal reinterpretation of modern 3D seismic is suggestive of untested reservoirs at Umiat. Prospects have been mapped in the footwall of the Umiat structure as well as downdip from the proven oil zone in the hanging wall. Initial internal volumetric calculations suggest there may be multi-million barrels of potentially recoverable oil combined in the hanging wall and footwall. Both prospects are deeper than the current reserves at Umiat which the Company expects will have a positive impact on producibility.

Initial development studies, focusing on the potential integration of Ultra Low Sulphur Diesel (ULSD) production, suggests that this development option adds further value to a future Umiat development, considering the high cost of diesel (~US$6-7/gal) on the North Slope of Alaska.

A separate Umiat-23H well performance review concluded that this well significantly underperformed due to poor drilling and completion techniques. This well was drilled in 2014 by a previous owner and flowed at a sustained rate of 200 BOPD with no water, and a maximum rate of 800 BOPD. Further review of the historical data includes a more conventional trajectory and completion design for a 5,000ft horizontal section that was modelled to produce at stabilised rates of between 800 and 1,600 BOPD. The Company believes an opportunity exists for the optimisation of historic subsurface development plans.

During the quarter, the Company commenced discussions with an Alaskan drilling operator regarding use of a new light weight rig and optimised operations to drill a cost-effective exploration well designed to unlock further upside in Umiat.

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