88E 88 Energy Limited

18 September 2024

88 Energy Limited

Significant Contingent Resource Update for Project Phoenix

Highlights

·   Major Milestone Achieved: New Contingent Resources estimates at Project Phoenix for the SMD-B and SFS reservoirs, independently verified by ERCE Australia Pty Ltd (ERCE), a globally respected authority in petroleum reserve and resource auditing.

·   Significant Resources Update: Existing Project Phoenix Gross Best Estimate (2C) Contingent Resources increases by over 50%, with an additional gross 128 million barrels of oil equivalent (MMBOE)², 81 MMBOE Net Entitlement to 88E, added from the SMD-B and SFS reservoirs, comprising:

►    115 million barrels (MMbbl) of Gross recoverable hydrocarbon liquids (oil and natural-gas liquids), 73 MMbbl Net Entitlement to 88 Energy; and

►    68 billion cubic feet (BCF) of Gross recoverable gas, 43 BCF Net Entitlement to 88 Energy.

·   Multi-Reservoir Discovery: Estimates from ERCE (SMD-B and SFS reservoirs) and Netherland, Sewell & Associates, Inc (NSAI) (Basin Floor Fan (BFF) reservoir) confirm Project Phoenix as a robust multi-reservoir discovery, with a total combined Gross Best Estimate 2C Contingent Resource of approximately 378 MMBOE (239 MMBOE Net Entitlement to 88E, refer to Tables 1 and 5).

·  Material Upside Potential: Prospective Resources of Net Mean Unrisked 155 MMbbl^1,3 independently verified by Lee Keeling and Associates Inc, in the Kuparuk (undrilled), SMD-A and C reservoirs (oil interpreted on logs at Hickory-1), offer compelling additional upside potential. Unrisked net 3U (high) of 321 MMbbls, 2U (best) of 153 MMbbls, 1U (low) of 53 MMbbls^1,3. The geological Chance of Success (CoS) of these prospects has been estimated as 71%, 81% and 81% respectively.

·  Strategic Development Opportunity Confirmed: Featuring the critical characteristics required for future commercialisation and monetisation, including:

►    A combined Best Estimate (2C) Contingent Resources of approximately gross 251 MMbbl (159 MMbbl net to 88E) of oil and natural-gas liquids (NGLs) across four stacked reservoirs, accessible from single surface location.

►    Located on prime Alaskan State lands, directly adjacent to the Trans-Alaskan Pipeline System (TAPS), and the Dalton Highway, with close proximity to the critical oil and gas services hub at Deadhorse on Alaska's North Slope.

►    Premium 37- 40^o API gravity oil successfully recovered, for a highly marketable and valuable light oil product.

·   Project Advancement Momentum: An extended period horizontal well flow test of the SMD reservoir, utilising the existing Franklin Bluffs gravel pad, is in the planning and design stage with the Joint Venture.  

·   Constructive Partner Progress: Ongoing discussions with joint venture partner Burgundy Xploration, LLC (Burgundy), could see Burgundy carrying all or part of 88 Energy's share of the 2025/2026 work program in exchange for an additional working interest in Project Phoenix.  

^{1. Cautionary Statement: The estimated quantities of petroleum that may be potentially recovered by the application of a future development project relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration, appraisal and evaluation are required to determine the existence of a significant quantity of potentially recoverable hydrocarbons. 88E is not aware of any new information or data that materially affects the information included in the relevant market announcement and that all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed.}

^{2. Gross (100%) best estimate contingent resources. NGLs are converted to oil equivalent volumes on a constant ratio basis of 1:1. Gas is converted to oil equivalent volumes on a constant ratio basis of 5.5 BCF per 1 MMBOE.}

^{3.  Please refer to page 8 and ASX announcement dated 23 August 2022.}

88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy, 88E, or the Company) is pleased to report a further, independently certified Contingent Resource estimate of 73 MMbbl of hydrocarbon liquids and 43 BCF of gas (net, unrisked best estimate (2C)), for the SMD-B and SFS reservoirs in Project Phoenix (~74.3% net working interest). The Contingent Resources at SMD-B and SFS were independently validated by ERCE, a globally recognised authority in petroleum and resource auditing.

Ashley Gilbert, Managing Director of 88 Energy, commented:

"This additional Contingent Resource estimate reaffirms the substantial potential of Project Phoenix, with four independent reservoirs now confirmed as discoveries. The confirmation of a multi-hundred-million-barrel discovered oil and NGL resource is a major milestone for 88 Energy and its shareholders.

We are now focused on planning an extended period horizontal flow test of the SMD reservoir, utilising the existing Franklin Bluffs gravel pad infrastructure. Simultaneously, we are in discussions with our Joint Venture partner regarding the next stage of advancement of the project. This may include Burgundy carrying 88 Energy's share of the anticipated 2025/26 work program in exchange for an additional working interest in Project Phoenix. Additionally, we will initiate a formal farm-out process in Q4 2024 to ensure the next phase of Project Phoenix's activities is well-funded.

Shareholders can look forward to more updates on our progress as we continue to mature and de-risk Project Phoenix towards a future potential commercialisation event."

Background on Project Phoenix (~74.3% WI)

The Hickory-1 discovery well was drilled in February 2023 and flow tested during the Alaskan winter season in Q1/Q2 CY24. Testing focused on the two shallower primary targets, the Upper SFS (USFS) reservoir, previously untested, and the SMD-B reservoir. Each zone was independently isolated, stimulated, and flowed to the surface either naturally or using nitrogen lift to facilitate efficient well clean-up.

Table 1: Summary of Project Phoenix gross Contingent Resources estimates by NSAI and ERCE

Table 2: Summary of Project Phoenix net entitlement to 88 Energy (63.3%) Contingent Resources estimates by NSAI and ERCE

^{Notes to tables 1 and 2:}

^{1.         ERCE: ERCE Australia Pty Ltd}

^{2.         NSAI: Netherland, Sewell & Associates Inc.}

^{3.         Refer to page 6, Appendix 2 and disclaimers for further details.}

^{4.         Million Barrels of Oil Equivalent (MMBOE) of estimate contingent resource. NGLs are converted to oil equivalent volumes on a constant ratio basis of 1:1. Gas is converted to oil equivalent volumes on a constant ratio basis of 5.5 BCF per 1 MMBOE.}

^{5.         Please refer to page 7 and ASX announcement dated 6 November 2023 for further details in relation to the BFF Contingent Resource estimate. Note the Basin Floor Fan (BFF) reservoir was drilled and tested on adjacent acreage by Pantheon Resources}

^{6.         88 Energy net resource entitlement of ~63.3% has been calculated using an average 74.3% working interest net of a 12.5% government royalty and a 4% Overriding Royalty on 18 leases.}

^{7.         Totals by reservoir rounded and project total may not sum due to rounding.}

Table 3: Summary of Project Phoenix Contingent Resources marketable liquid estimates

^{Notes to table 3:}

^{1.         MMBBLs of hydrocarbon liquids (oil and natural-gas liquids). NGLs are converted to oil equivalent volumes on a constant ratio basis of 1:1.}

^{2.         Gas is excluded given the limited market currently on the North Slope of Alaska. Future markets are anticipated to open with potential development of gas infrastructure under consideration. Refer to page 6 for further details with regard to hydrocarbon type and estimates}

^{3.         88 Energy net resource entitlement of ~63.3% has been calculated using an average 74.3% working interest net of a 12.5% government royalty and a 4% Overriding Royalty on 18 leases.}

^{4.         Sources are ERCE Australia Pty Ltd (for SMD-B and SFS reservoirs) and Netherland, Sewell & Associates Inc (for BFF reservoir), arithmetically summed.}

USFS flow test results

·      Peak flow rate: ~70 bopd

·      Maximum oil cut: 15%

·      Flow type: Natural flow followed by Nitrogen Lift

·      Oil samples: Multiple samples returned gravities ranging from 39.9 to 41.4^o API (light crude oil).

The natural flow of the USFS zone is noteworthy as it enhances the potential producibility from this zone (refer to the ASX announcement dated 2 April 2024).

SMD-B flow test results

·      Peak flow rate: ~50 bopd

·      Maximum oil cut: 10%

·      Gas to oil ratio: Low, with little to no measurable gas

·      Oil samples: Multiple samples returned gravities of 38.5 to 39.5^o API

For full details, refer to the ASX announcement dated 15 April 2024.

Advancement activities and key milestones

The Project Phoenix joint venture is currently planning a flow test of the SMD reservoir over an extended period at the Franklin Bluffs gravel pad in CY 2025/26. The reuse of the Franklin Bluffs gravel pad (previously used to drill the Icewine-1 and 2 wells) offers considerable cost savings over a purpose-built ice pad without compromising the objectives. The design phase for the horizontal well is progressing well, with ongoing assessments by ResFrac to optimise the completion strategy.

In parallel, 88 Energy is in discussions with Burgundy regarding a potential funding transaction. Burgundy is a private Texas company, supported by sophisticated oil and gas investors, that has invested more than US$25 million into Project Phoenix over the life of the project. 88E understands that Burgundy is progressing plans for a stock exchange listing, following which, it is anticipated that Burgundy will enter into an agreement to provide a carry to 88E for the anticipated 2025/26 work program, in exchange for an additional working interest in Project Phoenix. The provision of such a carry to 88 Energy would be subject to Burgundy raising the capital required alongside its listing process and at this stage there is no guarantee that a transaction with Burgundy will be completed. Accordingly, the Company intends to launch a formal farm-out process in Q4 2024 to ensure progress continues, irrespective of the outcome of Burgundy's listing process.

Table 4: Indicative Project Phoenix development timeline. ¹

^{1.This timeline is indicative and subject to change. The Company reserves the right to alter this timetable at any time. Horizontal production test subject to farm-out/funding as well as government and other approvals}

Summary of Project Phoenix Resources estimates

Contingent Resources estimate: Project Phoenix SMD-B and SFS reservoirs

The Contingent Resources estimates associated with the SMD-B and SFS reservoirs in Project Phoenix (~74.3% net working interest to 88E and ~63.3% net entitlement) and assessed by ERCE are summarised below as at 31 August 2024.

Table 5: Project Phoenix gross and net Contingent Resources estimates: SMD-B and SFS reservoirs

^{1. Source: ERCE Australia Pty Ltd}

^{2. 88 Energy net resource entitlement of ~63.3% has been calculated using an average 74.3% working interest net of a 12.5% government royalty and a 4% Overriding Royalty on 18 leases.}

^{3. 88 Energy cautions that the reported totals for Oil and Total MMBOE are an arithmetic sum of the individual hydrocarbon types within the SMD-B and SFS reservoirs. The arithmetically summed 1C estimate may be a conservative estimate and the arithmetically summed 3C estimate may be optimistic when compared to a statistical aggregation of probability distributions.}

^{4. The Contingent Resources classification is not required to be adjusted for the chance of development, as per PRMS 2018 guidance, and hence has not been carried out in this assessment.}

^{5. Gas is converted to oil equivalent volumes via a constant ratio of 5.5 BCF per 1 MMBOE.  Totals by reservoir rounded and project total may not sum due to rounding.}

^{6. Please refer to the disclaimers attached at Schedules 1 & 2 of this release for more information on the contingent resource report.}

About ERCE

ERCE is a globally recognised, independent petroleum Reserves and Resources auditor with over 40 years of experience. With a team of over 50 full-time technical staff, ERCE provides expertise in geoscience, reservoir engineering, facilities and cost engineering, and economic/commercial assessments across conventional and unconventional projects. ERCE has offices in the UK, Canada, Kuala Lumpur, and Perth, WA.

Contingent Resources estimate: Project Phoenix BFF reservoir

The maiden Contingent Resources estimate conducted by NSAI and associated with the BFF reservoir in Project Phoenix (~74.3% net working interest to 88E and ~63.3% net entitlement) is summarised below as at 1 November 2023.

Table 6: Project Phoenix gross and net Contingent Resources estimates: BFF reservoir

^{1. Source - Netherland, Sewell & Associates Inc.}

^{2. 88 Energy net resources have been calculated using a 75.227% working interest and a 16.5% royalty.}

^{3. 88 Energy cautions that the reported totals for Oil+NGL and Total MMBOE are an arithmetic sum of the individual hydrocarbon types within the BFF reservoir. The arithmetically summed 1C estimate may be a conservative estimate and the arithmetically summed 3C estimate may be optimistic when compared to a statistical aggregation of probability distributions.}

^{4. The Contingent Resources classification is not required to be adjusted for the chance of development, as per PRMS 2018 guidance, and hence has not been carried out in this assessment.}

^{5. Natural Gas Liquids (NGL's) are converted to oil equivalent volumes via a constant ratio of 1:1. Gas is converted to oil equivalent volumes via a constant ratio of 5.5 BCF per 1 MMBOE. Totals by fluid rounded and reservoir total may not sum due to rounding.}

Please refer to ASX announcement dated 6 November 2023 for further details in relation to the BFF Contingent Resource estimate.

Updated Prospective Resources estimate: Project Phoenix

The updated Prospective Resources estimates were prepared by Lee Keeling and Associates (LKA) as of 9 August 2022, prior to the drilling of Hickory-1. This update reflects the reclassification of the BFF and the SMD-B and SFS from Prospective Resources to Contingent Resources as of 1 November 2023 and 16 September 2024 respectively and has not been reviewed by NSAI or ERCE. The remaining Prospective Resources for Project Phoenix (~74.3% net working interest) are summarised below.

Table 7: Project Phoenix gross and net Prospective Resources estimate

^{1. 88 Energy net resource entitlement of ~63.3% has been calculated using an average 74.3% working interest net of a 12.5% government royalty and a 4% Overriding Royalty on 18 leases.}

^{2. The unrisked means, which have been arithmetically summed, are not representative of expected total from the prospects and implies a success case in all reservoir intervals. 88 Energy cautions that the arithmetically summed 1U estimate may be a conservative estimate and the arithmetically summed 3U estimate may be optimistic when compared to a statistical aggregation of probability distributions.}

^{3. COS represents the geological chance of success as assessed by 88 Energy and reviewed and endorsed by LKA.} 

^{4. Prospects are subject to a phase risk (oil vs gas). Chance of oil has been assessed as 100% for all targets except for the Kuparuk Formation which has been assessed as 70%.  Phase risk has not been applied to the unrisked numbers.}

^{5. The Prospective Resources have not been adjusted for the chance of development. Quantifying the chance of development (COD) requires consideration of both economic and other contingencies, such as legal, regulatory, market access, political, social license, internal and external approvals and commitment to project finance and development timing. As many of these factors are outside the knowledge of LKA they must be used with caution.}

^{6. Prospective Resource Estimates - determined pre-drilling of Hickory-1.}

^{7. Updated Prospective Resource Estimates reflect the removal of the resource estimate for the Basin Floor Fan which as of 1 November 2023 has been redetermined and classified as a Contingent Resource as well as the removal of the SFS and SMD-B reservoirs as of 16 September 2024 which have been redetermined and classified as a Contingent Resource. No other changes have been made to the original estimates, please refer to the ASX announcement of 23 August 2022.}

^{8. Please refer to the disclaimers attached as Schedules 1 and 2 of this release for more information on the prospective resources estimate.}

^{Cautionary Statement: The estimated quantities of petroleum that may be potentially recovered by the application of a future development project relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration, appraisal and evaluation are required to determine the existence of a significant quantity of potentially movable hydrocarbons.}

This announcement has been authorised by the Board.

Media and Investor Relations:

Pursuant to the requirements of the ASX Listing Rules Chapter 5 and the AIM Rules for Companies, the technical information and resource reporting contained in this announcement was prepared by, or under the supervision of, Dr Stephen Staley, who is a Non-Executive Director of the Company. Dr Staley has more than 40 years' experience in the petroleum industry, is a Fellow of the Geological Society of London, and a qualified Geologist/Geophysicist who has sufficient experience that is relevant to the style and nature of the oil prospects under consideration and to the activities discussed in this document. Dr Staley has reviewed the information and supporting documentation referred to in this announcement and considers the resource and reserve estimates to be fairly represented and consents to its release in the form and context in which it appears. His academic qualifications and industry memberships appear on the Company's website and both comply with the criteria for "Competence" under clause 3.1 of the Valmin Code 2015. Terminology and standards adopted by the Society of Petroleum Engineers "Petroleum Resources Management System" have been applied in producing this document.

SCHEDULE 1

Disclaimers:

Cautionary Statement for Prospective Resource Estimates - With respect to the Prospective Resource estimates contained within this report, it should be noted that the estimated quantities of gas that may potentially be recovered by the future application of a development project relate to undiscovered accumulations. These estimates have an associated risk of discovery and risk of development.  Further exploration and appraisal is required to determine the existence of a significant quantity of potentially moveable hydrocarbons. 

Hydrocarbon Resource Estimates - The Contingent and Prospective Resource estimates for Project Phoenix presented in this report are prepared as at 31 August 2024 for the SMD-B and SFS reservoirs and 1 November 2023 for the BFF reservoir (LR 5.25.1).  The Prospective Resource estimates remain unchanged from the 2022 independent report by LKA and are quoted on an unrisked basis together with the geological chance of success for each prospect.  The unrisked mean total presented in the table is not representative of the expected total from the three prospects and assumes a success case in all reservoir intervals.  88 Energy have considered the chance of discovering oil over gas to be 100% for all targets except for the Kuparuk Formation which was assessed to be 70%. Chance of development has not been estimated. Quantifying the chance of development (COD) requires consideration of both economic contingencies and other contingencies, such as legal, regulatory, market access, political, social license, internal and external approvals and commitment to project finance and development timing.  As many of these factors are outside the knowledge of LKA they must be used with caution.

Government Royalty and Overriding Royalty Interests - The Project Phoenix leases ("Leases") are situated in the State Lands of the North Slope of Alaska and are administered by the Alaskan Department of Natural Resources - Oil and Gas Division (DNR).  All leases issued by DNR are subject to a royalty and 88E's Leases are subject to a 12.5% government royalty.  In addition, a total of 18 leases are subject to an overriding royalty of 4.0% payable to non-related parties of the Company.  The net economic interest to 88E has therefore been calculated as 63.3% and the Net Entitlement Prospective Resources have been adjusted to reflect this.

Competent Person Statement Information - Information relating to contingent resource estimates for the SMD-B and SFS reservoirs have been supplied by ERCE, and the company has stated that it has been prepared in accordance with the definitions and guidelines set forth in the Petroleum Resources Management System, 2018, approved by the Society of Petroleum Engineers and have been prepared using probabilistic methods.  ERCE Australia Pty Ltd, the independent resource reviewer engaged to assess the SMD-B and SFS reservoirs, has consented to the inclusion of information relevant to their review in the form and context in which it appears.

Information relating to contingent resource estimates for the Basin Floor Fan reservoir have been supplied by NSAI, and the company has stated in the Report that it has been prepared in accordance with the definitions and guidelines set forth in the Petroleum Resources Management System, 2018, approved by the Society of Petroleum Engineers and have been prepared using probabilistic methods.  Netherland, Sewell & Associates, Inc., the independent resource reviewer engaged to assess the Basin Floor Fan reservoir, has consented to the inclusion of information relevant to their review in the form and context in which it appears. 

References to all Prospective Resources in this announcement relate to the 2022 report compiled by Lee Keeling and Associates, Inc. These resource estimates remain valid and no adjustments are required but will be reassessed if and when flow test data is obtained from any of these reservoirs.

Dr Stephen Staley, who is a Non-Executive Director of the Company, has more than 40 years' experience in the petroleum industry, is a Fellow of the Geological Society of London, and a qualified Geologist/Geophysicist who has sufficient experience that is relevant to the style and nature of the oil prospects under consideration and to the activities discussed in this document. Dr Staley has reviewed the information and supporting documentation referred to in this announcement and considers the prospective resource estimates to be fairly represented and consents to its release in the form and context in which it appears. His academic qualifications and industry memberships appear on the Company's website and both comply with the criteria for "Competence" under clause 3.1 of the Valmin Code 2015. Terminology and standards adopted by the Society of Petroleum Engineers "Petroleum Resources Management System" have been applied in producing this document.

Forward looking statements - This document may include forward looking statements. Forward looking statements include, are not necessarily limited to, statements concerning 88E's planned operation program and other statements that are not historic facts. When used in this document, the words such as "could", "plan", "estimate", "expect", "intend", "may", "potential", "should" and similar expressions are forward looking statements. Although 88E believes the expectations reflected in these are reasonable, such statements involve risks and uncertainties, and no assurance can be given that actual results will be consistent with these forward-looking statements. The entity confirms that it is not aware of any new information or data that materially affects the information included in this announcement and that all material assumptions and technical parameters underpinning this announcement continue to apply and have not materially changed.

SCHEDULE 2

Definitions and Glossary of Key Terms:

SPE definitions:

Prospective Resource

Prospective resources are estimated volumes associated with undiscovered accumulations. These represent quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from oil and gas deposits identified on the basis of indirect evidence but which have not yet been drilled. This class represents a higher risk than contingent resources since the risk of discovery is also added. For prospective resources to become classified as contingent resources, hydrocarbons must be discovered, the accumulations must be further evaluated and an estimate of quantities that would be recoverable under appropriate development project(s) prepared.

Contingent Resource

Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations, by the application of a development project not currently considered to be commercial owing to one or more contingencies. The resources shown in this report are contingent upon (1) acquisition of additional technical data that demonstrate producing rates and volumes sufficient to sustain economic viability across the acreage; (2) approval of a field development plan and regulatory permits; (3) demonstration of viable gas and water utilization or disposal methods; (4) demonstration of ability to market oil and natural gas liquids (NGL); (5) establishment of a viable North Slope gas market and development of infrastructure which is currently evolving; and (6) commitment to fund and complete the development project. If these contingencies are successfully addressed, some portion of the contingent resources estimated in the report may be reclassified as reserves; the estimates have not been risked to account for the possibility that the contingencies are not successfully addressed. The project maturity subclass for these contingent resources is development unclarified.

Glossary of Key Terms

SFS and SMD-B Contingent Resources - Disclosures under ASX Listing Rules 5.25, 5.27, 5.33 and 5.41

LR 5.25.1

The contingent resources are reported as at 31 August 2024.

LR 5.25.3, LR 5.25.4

This announcement does not contain disclosure of total petroleum initially-in-place, discovered petroleum-initially-in-place, total resource base, estimated ultimate recovery, remaining recoverable resources or hydrocarbon endowment.

LR 5.25.5

The resources information in this document is reported according to the Company's economic interest in each of the resources net of royalties.

LR 5.25.6

ERCE have used a probabilistic methodology to estimate the contingent resources. Once all contingencies have been successfully addressed, the probability that the quantities of contingent resources actually recovered will equal or exceed the estimated amounts is 90 percent for the low estimate, 50 percent for the best estimate, and 10 percent for the high estimate.

LR 5.25.7

Natural Gas Liquids (NGL's) are converted to oil equivalent volumes via a constant ratio of 1:1. Gas is converted to oil equivalent volumes via a constant ratio of 5.5 BCF per 1 MMBOE.

LR 5.27.3

Totals for Oil & NGL and Total MMBOE are arithmetically summed. The arithmetically summed 1C estimate may be a conservative estimate and the arithmetically summed 3C estimate may be optimistic when compared to a statistical aggregation of probability distributions.

LR 5.27.4

Contingent resources are reported for the SFS and SMD-B reservoir in the Project Phoenix area only.

LR 5.33.1

The contingent resources are reported for the Project Phoenix leased area, which includes the Toolik River Unit (refer announcement 28 February 2023 for specific leases and lease area). The leases are State leases and have a primary term until February 2028 under the Unit Agreement with the State of Alaska.

LR 5.33.2

The existence of a significant quantity of potentially moveable hydrocarbons and confirmation of a discovery is confirmed by regional data, seismic data, well data and flow test data.  In particular this is supported by the recent Hickory-1 well data, together with the historical Icewine-1 well data. The Hickory-1 well, together with wells drilled and tested on adjacent acreage, have recovered light oil, natural-gas liquids and gas during flow tests, confirming the extensive extent of the reservoirs and producibility of the reservoirs.

LR 5.33.3

ERCE conducted an independent evaluation and estimation of the SMD-B, Upper SFS and Lower SFS reservoir contingent resource using the probabilistic method.  The contingent resources estimated are within the sub-class of Development Unclarified, which is defined as a discovered accumulation where project activities are under evaluation and where justification as a commercial development is unknown based on available information. The Company will actively assess the commercial viability of the project and contingencies subsequent to the flow test of multiple reservoirs planned at Hickory-1.

LR 5.33.4

The estimates of contingent resources are not contingent on any technology that is currently under development.

LR 5.33.5

The contingent resources do not relate to an unconventional resource.

LR 5.41

The contingent resources have been prepared in accordance with the Society of Petroleum Engineers (SPE) 2018 Petroleum Resource Management System (PRMS) by Rhod Phillips as the qualified petroleum resource evaluator.

LR 5.42

The contingent resources are based on, and fairly represent, information and supporting documentation prepared by Rhod Phillips, a member of the Society of Petroleum Evaluation Engineers who is an employee of ERCE. Dr Jonathan Hull, CEO of ERCE has consented to the publication of these contingent resource estimates in the form and context in which they appear in this announcement.