Next Investors logo grey

88E releases internal resource estimate for Project Leonis


Published 05-JUN-2024 11:55 A.M.


3 min read

Shares Held: 68,888,890


Options Held: 6,296,297


Trust Centre

88E releases internal resource estimate for Project Leonis in the US

Yesterday our oil and gas exploration Investment, 88 Energy (ASX: 88E) released a maiden internal Prospective Resource estimate for one of its US oil and gas projects.

88E put out the estimate on Project Leonis on the North Slope of Alaska, USA.

Leonis is separate to 88E’s Project Phoenix where the company recently drilled Hickory-1 and made an oil discovery.

At Leonis 88E has defined a 381 million barrel prospective resource for the project (net to 88E).

88E Project Leonis

Next at Leonis, 88E is working on what it is calling a “targeted farm-out”.

In yesterday’s announcement, 88E mentioned that London group Stellar Energy Advisors were working on the farm-out deal and said that they already had “multiple parties” showing interest in the project.

88E’s goal is to drill Leonis in either 2025 or 2026.

Context on Project Leonis:

88E picked up project Leonis back in April last year.

The project sits on ~25,600 contiguous acres immediately south of Prudhoe Bay - the USA’s biggest-ever oil discovery.

88E Leonis oil

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:

  1. Reprocessing seismic data - improving the quality and resolution of the data to define the prospective areas inside the project
  2. 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 Alaskan assets

88E also gave an update on its other Alaskan assets:

In yesterday’s announcement, 88E confirmed that in Alaska the focus was:

  1. Project Phoenix - where 88E recently declared a discovery and ran a relatively successful flow test flowing oil to the surface from multiple reservoir targets.
  2. Project Leonis - the asset that 88E just put out a maiden prospective resource estimate on.

88E confirmed that for Project Phoenix, drilling horizontal production wells and an appraisal well at Leonis would follow up on what the company already knew.

88E said that it would look to divest or relinquish its other assets (Umiat and Icewine West) this year.

We don't mind the move to let go of some projects, given that 88E is a relatively small company and has enough on its plate with the Alaskan assets and its farm-in deal in onshore Namibia.

What’s next for 88E?

In the short term we want to see 88E achieve two of the key objectives we set for the company as part of our 88E Investment Memo:

Objective #3 of our 88E IM: Farm-out Project Leonis, USA

  • Milestones
    • ✅ Maiden prospective resource estimate
    • 🔄 Farm-out/JV MOU
    • 🔲 Binding farm-out/JV deal

Objective #1 of our 88E IM: Contingent resource estimates at Project Phoenix, USA

  • Milestones
    • 🔲 Contingent resource estimate #1 (SFS Reservoir)
    • 🔲 Contingent resource estimate #2 (SMD Reservoir)