88 Energy Limited has entered into a three-stage farm-in agreement with a wholly-owned subsidiary of Monitor Exploration Limited to earn up to a 45 percent non-operated working interest in onshore Petroleum Exploration License 93 (PEL 93), located in the Owambo Basin, Namibia.
The farm-in agreement provides a staged entry into PEL 93, an onshore acreage position comprising blocks 1717 and 1817 in the Owambo Basin, measuring 7142.9 square miles (18,500 square kilometers), 88 Energy said in an Australian Stock Exchange announcement Monday. The company added that the agreement provides an opportunity to earn a significant working interest, with the future potential to transition to become the project operator. 88 Energy expects the maximum total investment cost to be $18.7 million.
The agreement is between Eighty Eight Energy (Namibia) (Pty) Ltd, a newly formed, wholly owned subsidiary of 88 Energy, and Monitor Oil and Gas Exploration (Namibia) Pty Ltd (MELN), a wholly owned subsidiary of Monitor. According to the release, MELN currently holds a 75 percent working interest in the license and acts as the operator of the exploration and development of PEL 93. Privately owned Legend Oil Namibia (Pty) Ltd holds a 15 percent working interest and the Namibian government entity National Petroleum Corporation of Namibia (Pty) Ltd (NAMCOR) holds a 10 percent working interest.
Under the terms of the agreement, 88 Energy, together with the current working interest owners, will become party to a new joint operating agreement (JoA) in relation to the license. 88 Energy can earn up to a 45 percent 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, and any future work program budgets yet to be agreed”, according to the announcement.
The farm-in agreement remains subject to Namibian government and other regulatory approvals, which are expected to be received by the first quarter of 2024, the company said.
88 Energy said the license includes an extensive lead portfolio, with 10 significant independent structural closures identified from a range of geophysical and geochemical techniques. There is “considerable potential for more leads to be identified” as the dataset is expanded, the company noted. The program for the asset includes the acquisition of approximately 200 line-kilometres of low-impact 2D seismic in mid-2024 and a potential initial exploration well targeting the Damara play as early as the second half of 2025, according to the announcement.
“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”, 88 Energy Managing Director Ashley Gilbert said. “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”, Gilbert continued. “The License 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-kilometers of low-impact 2D seismic. This will minimize the environmental impact and be used to better define potential drilling prospects for as early as the second half of 2025”, Gilbert concluded.
Australia’s 88 Energy has operator exploration interests in onshore Alaska and non-operator production interests in onshore Texas. The company has been operating on the North Slope of Alaska since 2015, successfully drilling multiple exploration wells and acquiring extensive seismic data across a large acreage position.
Source : Rigzone
