Ann: Drilling Update, page-2

21 December 2015
Icewine #1 Drilling Update
88 Energy Limited (“88 Energy”, “the Company”, “Operator”) (ASX, AIM: 88E) is pleased to provide the following drilling update.
Highlights

•   Currently at 11,180’ – approaching Total Depth
•   Increased heavy gas observed whilst coring HRZ interval
•   96% recovery (87’ of 90’ recovered) in first HRZ core (11,075’-11,165’)
•   Cut / fluorescence observed while coring HRZ - not evident in core chips at surface
•   Second HRZ core currently underway
•   Early interpretation - large portion of HRZ at Icewine in thermal maturity sweetspot
•   Initial log analysis high-grades conventional potential on acreage
  Overview
  Core was successfully acquired in the HRZ interval from 11,075’ – 11,165’ with a 96% recovery factor. Whilst coring the HRZ interval, a pronounced increase in heavy gas fractions was exhibited in both the gas chromatograph and mass spectrometer. Additionally, oil shows with cut and fluorescence were observed in cuttings returned to surface.
  Once the core was laid down and cut into 3’ intervals for transportation, an additional analysis of rock chips taken directly from the core was undertaken. No cut or fluorescence was observed in these samples.
  The contra indicative heavy gases / shows whilst drilling versus the lack of cut / fluorescence at surface may be the result of contamination (oil, grease buildup) in the mud system. The core, isotubes of gas collected from the formation while drilling and mud samples have been mobilised to the lab for analysis. The reason for the contradictory results will be determined in due course, along with results from the planned evaluation program on the core.
  At this stage, it is too early to make any definitive statements regarding the thermal maturity of the HRZ at the Icewine#1 location; however, it is likely that a gas/condensate phase has been encountered, which bodes well for the thermal maturity model at Project Icewine, in a general sense.
  The well continues to remain within budget.
  Current Operations
  As at 20th December 13:00 (AK time), an additional core barrel had taken 15’ of core (11,165’- 11,180’) in the base HRZ interval. Coring operations are continuing.