Ann: Drilling Update, page-4

Forward Plan
The forward plan is to finalise the current coring operation and then conduct the statutory Blow Out Preventer test before making a decision on whether to deepen the well to intersect the Kuparuk sands.
The well is planned to a Total Depth of 11,600’ and was scheduled to take 30 days of drilling to complete. The primary objective of the well is the HRZ shale formation, targeting a huge unconventional resource prize.
Please refer to the presentation released 5th November 2015 for more details on the well, look-forward operations and evaluation program.
Further updates will be made in a timely fashion as information becomes available.
Early Conventional Insights – Icewine Conventional Potential High-Graded
The HRZ remains the primary target at Icewine and results to date are encouraging for the play in the project area, although full evaluation will not be complete for several months. Additionally, preliminary petrophysical analysis of the logs acquired in the intermediate section from 3,500’ – 8,500’ are encouraging for Brookian conventional potential at Icewine#1 and across the leasehold.
For example, one of several conventional zones of interest in the Brookian sequence at Icewine#1 extends from approximately 4,000’ to 4,400’ and comprises a series of three stacked fine grained sandstone to siltstone sequences within the Schrader Bluff Formation. The sequences range from 61’ to 110’ in gross thickness with net:gross ranging from 78% – 100%. The average porosities of the clastic sequences are within the range of 18% - 19% with peaks of up to 28% porosity. Preliminary petrophysical analysis supports oil saturations in these sandstone units above 60% and up to 75%. Hydrocarbon shows whilst drilling this interval encountered mud log gas shows comprising predominantly C1 and minor oil shows, likely due to the fact that this interval is not within closure.
The commercial implications of these hydrocarbon bearing Brookian sandstones will be fully investigated following the completion of the well. The indications of significant volumes of oil in the system and excellent reservoir are highly encouraging on a regional basis. The challenge is now to find the oil within closure on the Project Icewine leasehold, which requires 3D seismic.
Managing Director of 88 Energy Limited, Dave Wall commented: “Preliminary results remain supportive of the HRZ play at Project Icewine; however, evaluation has only just commenced and uncertainty remains high.
The 96% recovery factor of the first core in the HRZ interval provides us with an excellent opportunity to evaluate the potentially huge HRZ prize over the coming weeks.
Early interpretation of the conventional potential at Project Icewine has been high-graded with evidence of significant amounts of oil and excellent reservoir in the region. Acquisition of 3D seismic will be crucial to unlocking this potential and, with the success of the recent placement and share purchase plan, the Company is well placed to execute its seismic strategy in the near term.”