88E seismic update & neighbour drill results weeks away…

Yesterday our oil & gas Investment 88 Energy (ASX: 88E) put out an update on its onshore project in Namibia.

88E recently finished a ~203-line km 2D seismic program on the project it is earning a 45% interest in.

Yesterday 88E announced that initial processing of the seismic data has mapped out “Significant structures” - this is before 88E does its own analysis/interpretation.

We think that is positive news considering the whole purpose of the seismic program was to rank potential drill targets and to put prospective resources out for them.

Here are two of the multiple leads 88E identified:

88E expects a maiden prospective resource on the project in Q1-2025.

Before then we are looking forward to seeing 88E put out the results of its own analysis/interpretation of the seismic data.

The interpretation and a maiden prospective resource estimate are both precursors for a drill program that 88E is guiding for some time 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

Results 88E’s neighbours (Recon Africa) drill program coming in the next few weeks.

In yesterday’s announcement 88E also mentioned that results from Recon Africa’s drill program is due in the next few weeks.

Recon’s ground sits to the east of 88E’s and they are targeting (in 88E’s words) “the Damara play, which is the same play interpreted by 88 Energy and its JV partner in the PEL 93 acreage”.

While the two companies ground sit in different parts of Namibia (and likely on different geology) - from a market perspective whatever happens with Recon will likely reflect on 88E’s share price (or at least the markets interest in 88E).

IF Recon make a giant discovery then we would expect that interest to trickle down into 88E’s ground.

We have already seen Recon sign a farm-out deal for a 20% interest in their project for US$13M - as part of a CAD$35M financing deal.

That deal alone shows there is corporate interest in assets onshore in Namibia.

Again, as mentioned above, we think interest will only get stronger if Recon’s drill program is successful.

We will be watching for news from Recon over the coming weeks.

Check out our thoughts on the Recon drilling and how it impacts 88E here: 88E starts 2D seismic, neighbour $438M ReconAfrica's spud is any day now…

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.