88E awards 2D seismic contract for Namibian project

Our oil and gas Investment 88 Energy (ASX: 88E) just awarded 2D seismic contracts for its onshore Namibian asset.

88E is currently farming in a 45% interest into the Namibian assets - joint venture with Monitor Exploration.

The first phase of work as part of the farm-in agreement is to run a ~200-line km 2D seismic survey.

The 2D seismic is expected to be completed in Q3-2024 with results expected in Q4-2024.

The whole program is working toward a maiden drill program as early as 2H 2025.

What is 88E looking to do with the 2D seismic program?

At a very high level the whole purpose of the program is to take the 10 leads Monitor & 88E already have and turn them into credible drill targets.

The project has already had some 2D seismic work done on it - the next phase of works will be to add to that data to work out the best targets where 88E and Monitor think there is a good chance of drilling a successful well.

Background on the contractor running the program:

We noticed that the contractor 88E & Monitor have chosen is the same one that one of our other Investments Invictus Energy used for its 2D seismic programs in Zimbabwe (Polaris).

Considering the Monitor teams have links back to Invictus (IVZ director Robin Sutherland is part of the Monitor team) it doesn't surprise us that networks are being leveraged to get things done on the ground.

Polaris have done these type programs several times and have “contributed to many world-class discoveries with over 1,000 projects completed on four continents since 1996”.

Interestingly they are also the same contractors 88E’s regional peer Recon Energy Africa have used.

Background on 88E’s Farm-in deal -

88E’s asset was picked up by the JV partner Monitor Exploration back in 2018 - way before any of the major offshore discoveries were made in Namibia in 2022.

Since then Monitor has run airborne geophysics and used existing 2D seismic data to map out 10 different leads across the project area.

88E is now coming in to fund more seismic and two wells - at the moment 88E owns 20% of the project, after the first two wells are drilled 88E will hold 45%.

So at the moment, 88E has already paid for its share of the seismic program.

Why we like 88E’s Namibian asset:

• Huge ground position - ~70x the size of 88E’s Project Phoenix in the North Slope of Alaska, USA. The project is large enough to host a large resource base.
• Namibia’s fast developing oil and gas industry - recent giant discoveries offshore by TotalEnergies and Shell have put Namibia on the map. Namibia being touted as the next Guyana where US supermajors Exxon and Hess are making discovery after discovery.
• Namibian onshore peer re-rated by over 40x - ReconAfrica drilled its first well at its onshore Namibian project back in 2021. Between 2020 and 2021 Recon’s share price went from CAD$0.30 to CAD$12.50+.
• Project vendors linked to Invictus Energy (ASX: IVZ) - IVZ director Robin Sutherland is a part of the team doing the deal with 88E. Robin was also involved in EnergyAfrica, which sold to Tullow Oil for $500M in 2004 and then again with Tullow Oil as it went onto make discoveries across East Africa.
• Early stage with plenty of upside - 88E is getting in on the project at a very early stage. There is scope for 88E to run the seismic surveys, define a large prospective resource and firm up a drill program over the next 12-24 months.
• Strategically located - Sits next to one of Africa’s largest economies, South Africa, which is looking to replace its retiring coal-fired energy generation fleet.

See our deep dive note on the Namibian asset here: 88E heading to Africa on frontier oil hunt - following Shell and Totals 11 billion barrel lead