88 Energy the execution of a three stage farm-in agreement with a wholly-owned subsidiary of Monitor Exploration Limited (Monitor) to earn up to a 45% non-operated working interest in onshore Petroleum Exploration Licence 93 (PEL 93), located in the Owambo Basin, Republic of Namibia.

Farm-In Agreement detail

The Farm-In Agreement is between Eighty Eight Energy (Namibia) (Pty) Ltd (88EN), a newly formed, wholly owned subsidiary of 88 Energy and private Namibian company, Monitor Oil and Gas Exploration (Namibia) Pty Ltd (MELN), a wholly owned subsidiary of Monitor. MELN currently holds a 75% working interest in the Licence and acts as Operator of the exploration and development of PEL 93. Private Namibian company, Legend Oil Namibia (Pty) Ltd (Legend) holds a 15% working interest and and Namibian government entity National Petroleum Corporation of Namibia (Pty) Ltd (NAMCOR) holds a 10% working interest in the Licence.

Under the terms of the Farm-In Agreement 88 Energy, together with the current working interest owners, will become party to a new Joint Operating Agreement (JoA) in relation to the Licence and may earn up to a 45% working interest in PEL 93 by funding its share of agreed costs under the 2023-2024 approved work program and budget as defined in the Farm-In Agreement (2024 Work Program), and any future work program budgets yet to be agreed. The maximum total investment costs are anticipated to be US$18.7 million. 

Background to the Licence area

PEL 93 covers a vast 18,500 km² acreage position in the north of Namibia, comprising blocks 1717 and 1817 within the Owambo Basin. The region has been identified as one of the last remaining underexplored onshore frontier basins and one of the World’s most prospective new exploration zones.

Recent drilling results on nearby acreage has highlighted the potential of a new and underexplored conventional oil and gas play in the Damara Fold belt, referred to as the Damara Play.

Historical assessment utilised a combination of techniques and interpretation of legacy data to identify the Owambo Basin, and specifically blocks 1717 and 1817, as having significant exploration potential. 88 Energy has been impressed with the systematic exploration approach undertaken by Monitor since award of PEL 93 in 2018 and is extremely encouraged by the correlation and validation of results to date, which has highlighted the enormous potential of the acreage.

PEL 93 has entered the first renewal period which requires a firm commitment to complete a (i) 200+ line-kilometre 2D seismic program (minimum spend of US$2 million) and (ii) to drill a contingent exploration well within a two-year period commencing October 2023.

About Monitor

Monitor is a private UK exploration company, established in 2018, for onshore oil and gas exploration with a focus on Namibia. Monitor was formed by Geodynamics Worldwide (Geodynamics), a specialist oil service company, and has leveraged this proprietary relationship to select and survey the most promising acreages positions. The management and technical team at Monitor have considerable business experience in the sector on the African continent, including Namibia, and will be an invaluable partner to 88 Energy in the advancement of PEL 93.

“The execution of this farm-in agreement with Monitor provides 88 Energy and its shareholders with a fantastic opportunity to earn a significant working interest in a very large scale, highly prospective, under-explored acreage position on attractive and logically staged commercial terms. 

We are very pleased to be partnering with Monitor who will provide a wealth of technical expertise and strong in-country and regional exploration experience. Monitor has completed a systematic historical work-program that has identified significant large-scale, untested prospects.

While 88 Energy is continuing its focus on its existing Alaskan North Slope assets, PEL 93 provides a logical expansion of 88 Energy’s existing portfolio, with similar scale and potential that our shareholders are accustomed to. The Licence includes an extensive lead portfolio which will provide an increased level of activity and value catalysts throughout the year.

We look forward to providing further detail on the project including an upcoming activity schedule aimed at delivering an initial program of approximately 200 line-kilometres of low-impact 2D seismic. This will minimise the environmental impact and be used to better define potential drilling prospects for as early as the second half of 2025,” 88 Energy Managing Director, Ashley Gilbert, commented.

Forward work plan
Monitor has utilised a range of geophysical and geochemical techniques to assess and validate the significant potential of the acreage since award of PEL 93 in 2018. It has identified 10 independent structural closures from airborne geophysical methods and partly verified these using existing 2D seismic coverage.

Further, ethane concentration measured in soil samples over interpreted structural leads validates the existence of an active petroleum system, with passive seismic anomalies also aligning closely to both interpreted structural leads and measured alkane molecules (c1-c5) concentrations in soil.

The forward work-program will start with a low impact ~200 line-kilometre 2D seismic program focusing on confirming the structural closures of the 10 independent leads identified. The 2D seismic program will be conducted in mid-2024 following a period of planning, public consultation, updating of environmental compliance requirements and relevant approvals. Results from the 2D seismic program will then be incorporated into existing historical exploration data over the acreage, with results used to identify possible exploration drilling locations.