88E adds to prospective resource at US project
Our oil and gas Investment 88 Energy (ASX: 88E) just added to its prospective resource for one of its US exploration projects.
The resource upgrade came from project Leonis which sits immediately south of Prudhoe Bay - the USA’s biggest-ever oil discovery.
After today’s announcement Leonis has a total net mean prospective resource to 88E of 664 million barrels of oil (MMbbl).
88E wants to be drilling project Leonis in Q1 of 2026.
And now we think the project has a prospective resource big enough to attract potential project farm out partners (which 88E is working on finding right now).
Now with the prospective resource number at a level where a discovery would be material for 88E (and any potential future farm in partner) we think 88E could surprise to the upside with newsflow from Project Leonis.
Especially considering where the 88E market cap is sitting right now.
88E (at 0.1c per share) is capped at $29M and has ~$7.2M cash in the bank (at 30 Dec 2024).
Why we like Project Leonis:
88E picked up Project Leonis back in April last year.
The Leonis asset sits on ~25,600 acres immediately south of Prudhoe Bay - the USA’s biggest-ever oil discovery.
At the time of acquiring the project 88E knew that:
- The project was fully covered by existing 3D seismic data, AND
- The project had historic exploration data from the Hemi Springs Unit #3 well drilled by ARCO in 1985.
Since then, 88E updated its understanding of the project by:
- Reprocessing seismic data - improving the quality and resolution of the data to define the prospective areas inside the project
- Re-analysing all the data from the Hemi Springs Unit #3 well - so far 88E has calculated >200ft of net pay across one reservoir (USB) and is working with a theory that the field could be similar to the already producing fields to the north (Polaris, West Sak, and Orion fields).
88E’s plan has always been to mature up the project, and then farm it out to a potential partner.
In today’s announcement 88E confirmed that “planning and permitting for the tiri-1 exploration well” would start and that “Llamas and Bannister Energy Advisors” would work on finding a farm-out partner for the project.
88E already has old well data showing ~200 feet of pay from the project's main reservoir target so we think there is a pretty solid amount of data on the project - enough to get external parties interested in the asset.
Trump coming back into office could also help with 88E’s farm-out pursuits…
US oil and gas to thrive withTrump in office?
During his first week in office Trump signed an executive order which was called Unleashing Alaska’s Extraordinary Resource Potential.
(Source)
This order lifted many of the restrictions on exploration for mineral resources and oil & gas in the state.
We think 88E is a clear winner from this with a big chunk of its assets based in Alaska.
You may remember back when Biden first took office there were questions over 88E’s exploration licence with the new orders that were signed to prevent exploration in the region.
Although 88E hasn’t had issues with permitting before or since that, we think that increased activity in the region (and subsequent infrastructure) will make the company’s projects more attractive.
What else is 88E up to?
🔄 Maiden prospective resource estimate for Namibian Asset (H1 2025)
88E recently finished a ~203-line km 2D seismic program on the project it is earning a 45% interest in.
Across the project 88E has defined multiple leads of which two were singled out recently:
88E expects a maiden prospective resource on the project in H1-2025.
The maiden prospective resource estimate would be a precursor wo what 88E has said could be a drill program in 2026:
Objective #4: Firm up drill target at the Namibian asset
Milestones
✅ 2D seismic program starts
✅ 2D seismic program completed
🔄 2D seismic results & interpretation
🔲 Maiden prospective resource estimate
🔲 Primary drill target selected
Source: “What we want to see 88E deliver” section - 88E Investment Memo 20 May 2024
🔄 Project Phoenix - appraisal well planning
We noticed in 88E’s most recent quarterly that the company had started planning and design work for an appraisal well at its Phoenix asset.
This is where 88E would be following up the drilling and flow testing work that happened at Hickory-1 in 2023/2024.
