88 ENERGY LIMITED

ASX LODGEMENT OF ANNUAL REPORT

88 Energy Limited (ASX:88E; AIM:88E) ("88 Energy" or "Company") advises that a copy of the Company's Annual Report for the year ended 31 December 2020 (the "Annual Report") has been lodged on the ASX along with the Company's 2020 year-end Corporate Governance Statement and Appendix 4G.

The Annual Report, which was sent to shareholders today, is available on the Company's website at www.88energy.com along with copies of each of these other documents.

Set out below is the Chairman's Statement as included in the Annual Report.

Also, set out below is a summary of the Company's audited financial information for the year ended 31 December 2020 as extracted from the Annual Report, being:

·       Consolidated Statement of Comprehensive Income;

·       Consolidated Statement of Financial Position;

·       Consolidated Statement of Changes in Equity; and

·       Consolidated Statement of Cash Flows.

Media and Investor Relations:

CHAIRMAN'S STATEMENT

Dear Shareholders

2020 will be remembered as a year in which a global pandemic wreaked havoc on the world economy driving down demand for crude oil. A price war between OPEC and Russia, US political upheaval and the charge toward greener energy added to this volatile mix. It is pleasing therefore to report that in this very high-risk environment confronted by adverse conditions 88E retained its focus, growing its Alaskan portfolio and exploration program.

In April 2020, the company announced the results of the Charlie-1 well. The well was drilled on time and within budget and penetrated sandstones in seven stacked targets and shale in one target. Analysis of logs and sidewall cores subsequently confirmed condensate discoveries in the Torok Formation and oil in the Seabee Formations. Importantly the cost for Charlie-1 was borne by an industry partner and the well results have provided an excellent base for follow up exploration / appraisal via industry farmout.

Success at Charlie-1 was followed by an off market bid for XCD Energy, which delivered the Project Peregrine to 88E. adding to our Alaskan exploration portfolio. The project was then farmed out to a US based group, maintaining leverage for our shareholders whilst lowering the cost risk. The takeover and subsequent farmout were both executed during an adverse environment and speaks volumes for 88E's management.

As I write, Rig-111 is on location preparing to drill the Merlin-1 well which is targeting 645 million barrels of gross mean prospective resource. Flow testing of Merlin-1 is planned if wireline logging confirms a discovery. A second well, Harrier-1, is planned to commence immediately following completion of operations at Merlin-1, subject to results from Merlin-1, scheduling and permit approvals. Harrier-1 is targeting a gross mean prospective resource of 417 million barrels.

Each of the Merlin and Harrier prospects is located on trend to an existing discovery in the same play type. This has de-risked the prospects considerably and resulted in a relatively high independently estimated geologic chance of success. This continues our record of participating in significant wells offering substantial upside to 88E shareholders in the event of success.

As we approach the results of the Merlin-1 well, it is again worth reminding ourselves why 88E chose to explore in Alaska. At the outset, 88E cast the net far and wide in search of a project that could make a meaningful difference; one which would capture investor attention with transformational upside. The source rocks of Alaska have been described as unbelievably rich and prolific, having generated and expulsed about 1.5 trillion barrels of oil. Yet only a small fraction of that 1.5 trillion barrels has been found, leaving vast potential remaining to be discovered.  Almost all the remaining fields in Alaska are stratigraphic traps rather than anticlines and require a subtler exploration approach, which 88E is pursuing as it targets reservoirs adjacent to those same source rocks.

Our early initiative to target Alaska has been validated by recent exploration successes and the arrival of new entrants on the Alaskan exploration scene. As recently as February 2021 exploration success has been reported by Pantheon Resources close to the border of our central acreage. During the year, S&P Global Platts reported that Oil companies could spend up to $24 billion on new production in Alaska over the next ten years. Access to existing infrastructure; a very supportive and stable State Government and significant exploration upside have long been recognised by 88E.

88E is now Operator on several active Exploration / Appraisal Projects across 444,517 net acres, including the recently acquired Tract 29 and Umiat Unit Leases.  Unlike the lower 48 States, Alaskan leases have an attractive 7-10-year term with no mandatory work commitments and a low 16.5% base royalty. Our prospective land holding is now of a size one would normally associate with the big end of town and provides continued scope to attract partners.

The Alaskan program has been competently executed by our Managing Director, David Wall, with the assistance of a small, dedicated team. David has announced that he will be moving on once drilling and evaluation of Project Peregrine is concluded this season. David leaves on good terms and we wish him well. His role will be filled by Ashley Gilbert who has worked closely with David over several years. Our Alaskan based Operations Manager, Erik Opstad will continue in this role and enjoys our full support.

88E has prudently raised additional capital in advance of the 2021 program. We all know the process of evaluation is not without risk; however, we look to the future with considerable optimism as we unlock both the conventional and unconventional potential of our Alaskan exploration acreage.

Amidst the gloom cast by Covid-19 there is the potential for a future oil boom for several reasons. There has been a big decline in exploration; major oil companies are hedging bets by betting on renewable energy; widespread Covid-19 inoculations, unprecedented fiscal stimulation and low interest rates will drive economic growth and hence demand for oil. Some analysts predict oil will trade in the plus $80 per barrel range later this year and these factors will likely create tailwinds for our Alaskan initiatives.

Before closing I would like to thank the Department of Natural Resources, the Alaska Oil and Gas Conservation Commission; the North Slope Borough, Bureau of Land Management and other regulatory agencies that have facilitated our exploration effort in the State.

Our mission would not be possible without your support as shareholders in what has been a challenging yet exciting environment.  Our dual listing on both ASX and AIM has garnered a wide investor base and we have been ably supported by our brokers and advisers EurozHartleys and Cenkos.

We look forward to a successful 2021 year.

Yours faithfully,

Michael Evans
Non-Executive Chairman

The Consolidated Statement of Financial Position should be read in conjunction with the notes to the financial statements.

The Consolidated Statement of Changes in Equity should be read in conjunction with the notes to the financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS

The Consolidated Statement of Cash Flows should be read in conjunction with the notes to the financial statements.