Operations Update - Project Icewine

16 April 2015 Project Icewine, North Slope, Alaska - Update Services Agreement Executed to Facilitate Fast Tracking of Drilling * Permitting process for drilling at Project Icewine is underway * Utilisation of existing gravel pad at Project Icewine may provide substantial benefits in preparation for drilling in terms of both timing and cost * 88 Energy progressing discussions with multiple parties for Project Icewine funding / farmout * Commencement of exploration activities targeted in 2015 to access favourable 85% tax credit rebates 88 Energy Ltd ("88 Energy", "Company") is pleased to announce that it hassigned a Services Agreement with US-based Fairweather Science ("FWS") tofacilitate fast tracking of permitting for the drilling of a well at itsProject Icewine acreage, located on the North Slope of Alaska. FWS is an experienced service provider in Alaska and has a team of permittersthat have extensive experience in state (of Alaska) and federal permitting,developing plan of operations, regulatory compliance, and negotiatingmitigation measures. The FWS team is comprised of Anchorage-based staff thatare available to meet regularly with agency representatives to monitor permitapproval status. The team at FWS has identified the presence of an existing gravel pad on theProject Icewine leases that may provide substantial benefits to the ProjectIcewine Joint Venture. Specifically, the use of the existing gravel pad willminimize adverse effects on vegetation, habitat, impacted wildlife and culturalresources thus possibly fast tracking permitting for a well to be drilled atthe site prior to the end of CY2015, subject to regulatory approvals. Figure 1: LIDAR Data Showing Existing Pad and Potential Well Location (pleaserefer to the pdf version of this announcement available from the Company'swebsite) Already several permits that have the longest regulatory review period have haddocumentation drafted for submission to the relevant agencies in Alaska. Thisincludes the development of a draft Plan of Operations for the drilling of theIcewine #1 exploration well. A cultural resource clearance has been obtainedfor the site and several water withdrawal locations are being researched tosupport drilling and camp operations. Substantial research and planning isunderway to obtain additional permit approvals. A pre-application meeting withregulatory agencies is being planned before the end of the month to officiallystart the permitting process. The goal of these meetings is to facilitate anopen, round-table discussion, to answer questions, relieve concern and provideall the information possible for the agencies to receive and process permitapplications quickly. Background - Existing Pad at Project Icewine The Franklin Bluffs #1 well was designed as a shallow coal bed methane test(Bureau of Land Management, 2005) which encountered mechanical issues and wasplugged and abandoned at 1818 feet prior to reaching its objective atapproximately 2500 feet. The large pad from which it was drilled hassubsequently been used as a general staging area for various regionalactivities and is considered suitable as a potential location for the drillingof the first well at Project Icewine. Potential benefits associated with the use of the existing pad, which islocated on an easement between the Dalton Highway and the TransAlaska PipelineSystem, include: * Likely faster processing time for permits related to drilling, subject to regulatory approvals * Cost savings associated with lower construction costs for the well pad * Possible cost reductions via use of an existing all purpose camp, subject to availability and negotiations By taking advantage of these benefits, the Project Icewine Joint Venture willbe able to access the full 85% in cash rebates offered by the State of Alaskain relation to exploration activity undertaken in CY2015 (prior to a reductionin the rebate to 75% in 1H 2016). Forward Plan The Joint Venture is progressing permitting activity and well planning tofirm-up the schedule for the drilling of the Icewine #1 exploration well andwill provide further updates to shareholders as appropriate. The Company is also making headway in relation to funding / farm-out of itsshare of exploration costs (net of the generous rebate) and, despite the lowoil price environment, remains confident of achieving an accretive outcome forshareholders. Having access to the higher (85%) rebate in CY2015, as well asthe other advantages likely to be afforded through use of the existing pad,will facilitate these discussions. Yours faithfully Dave WallManaging Director88 Energy Ltd About 88 Energy: 88 Energy recently acquired an initial 87.5% working interestand operatorship in 99,360 acres onshore the prolific North Slope of Alaska("Project Icewine"). The North Slope is the host for the 15 billion barrelPrudhoe Bay oilfield complex, the largest in North America. The Company, withits Joint Venture partner Burgundy Xploration, has identified two highlyprospective play types that are likely to exist on the Project Icewine acreage- one conventional and one unconventional. The large resource potential ofProject Icewine was recently independently verified by leading internationalpetroleum resource consultant DeGolyer and MacNaughton. In addition to theinterpreted high prospectivity, the project is strategically located on ayear-round operational access road and only 35 miles south of Pump Station 1where Prudhoe Bay feeds into the TransAlaska Pipeline System. The Company plansto progress drilling and seismic activities in the near term to take advantageof the globally unique fiscal system in Alaska, which allows for up to 85% ofCY2015 exploration expenditure to be rebated in cash. Media and Investor Relations: Australia 88 Energy [email protected]+61 8 9485 0990 Hartleys LtdAs Corporate AdvisorMr Dale Bryan+61 8 9268 2829 United Kingdom RFC Ambrian LimitedAs Nominated AdviserMr Oliver Morse+61 8 9480 2500