88 Energy Regulatory News (88E)

This announcement contains inside information

88 Energy Limited

Operations Update

88 Energy Limited ("88 Energy" or the "Company", ASX:88E, AIM 88E) is pleased to provide the following update related to its operations on the North Slope of Alaska.

Highlights

· Mobilisation of snow road construction equipment to the Merlin-1 drill site has commenced

· Spud of Merlin-1 remains on schedule for mid-late February 2021

o Targeting independently assessed gross mean prospective resource of 645 million barrels*

· Lease AA095899 in the recent Coastal Plain lease sale formally awarded

Peregrine Drilling Imminent - Mobilisation Underway

Permitting and planning associated with the drilling of Merlin-1 at 88 Energy's Peregrine Project, located in the NPR-A region of the North Slope of Alaska, remains on schedule for a mid to late February spud. Schedule permitting, the Harrier-1 well will commence drilling once operations have completed at Merlin-1.

Mobilisation of snow road construction equipment to the Merlin-1 location has commenced. To date 34 miles of a total ~90 miles of the snow road to Merlin-1 have been constructed.

88 Energy is carried for the first US$10m of an estimated US$12.6m total expenditure, in exchange for a 50% working interest in the project, as part of a farm-out agreement (see announcement dated 4th December 2020).

*Please refer to the XCD Energy ASX release dated 20 May 2020 for full details with respect to the Prospective Resource estimate and associated risking.

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.

Coastal Plain Lease Award

Lease AA095899 was formally awarded, effective 1 January 2021. The lease is considered highly prospective for oil and gas as several prospects on the Central North Slope side of the boundary are interpreted to extend into this area. It is considered likely that a significant portion of these oil pools may be accessed without surface access within the Coastal Plain area.

About Project Peregrine - Imminent Drilling

Project Peregrine is located in the NPR-A region of the North Slope of Alaska and encompasses ~195,000 contiguous acres. It is situated on trend to recent discoveries in a newly successful play type in topset sands in the Nanushuk formation. 88 Energy has a 100% working interest in the project that will reduce to 50% post the completion of funding as part of a recent farm-in, whereby 88E is carried on the first US$10m (of an estimated US$12.6m total cost) for the Merlin-1 well.

Project Peregrine and Recent Nanushuk Discoveries

The Merlin-1 well is scheduled for spud in mid-late February 2021 and is targeting 645 million barrels of gross mean prospective resource* to commence immediately following completion of operations at Merlin-1, subject to results from Merlin-1 and weather. Harrier-1 is targeting gross mean prospective resource of 417 million barrels*. Harrier-1 is expected to cost ~US$7m.

*Please refer to the XCD Energy ASX release dated 20 May 2020 for full details with respect to the Prospective Resource estimate, associated risking and applicable Cautionary Statement.

Each of the Merlin and Harrier prospects is located on trend to an existing discovery, in the same play type (Nanushuk topsets). This has de-risked the prospects considerably and resulted in a relatively high independently estimated geologic chance of success.

The below graphics can be found in the pdf version of this announcement available from the Company's website;

- Mobilisation to Merlin-1

- Project Peregrine and Recent Nanushuk Discoveries

- Independent Resource Assessment

- Merlin-1 - on trend to large Willow oil field

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 35 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.

Appendix 5B

Mining exploration entity or oil and gas exploration entityquarterly cash flow report

a)

6.1 Payments relate to Director and consulting fees paid to Directors. All transactions involving directors and associates were on normal commercial terms.

Compliance statement

1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

2 This statement gives a true and fair view of the matters disclosed.

Date: 21st January 2021

Authorised by: By the Board

(Name of body or officer authorising release - see note 4)

Notes

1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity's activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.

2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. If this report has been authorised for release to the market by your board of directors, you can insert here: "By the board". If it has been authorised for release to the market by a committee of your board of directors, you can insert here: "By the [name of board committee - eg Audit and Risk Committee]". If it has been authorised for release to the market by a disclosure committee, you can insert here: "By the Disclosure Committee".

5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations, the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.